For the initial quarter of 2022, the solar sector experienced its highest expansion in the residential market, adding 1.2 GWdc to the power grid, even though other segments were affected by supply chain issues. Solar installations accounted for about 50% of the capacity added in that quarter’s electricity generation sector. While industry forecasts suggest a decline overall until 2022, the number of solar installations is predicted to return to levels of 2021 in 2024.
Despite the rapid growth in solar power, the U.S. requires more efforts to increase production and manufacturing if we want to meet the goal set by this administration to have 100% clean energy in 2035. There is still hope. President Joe Biden signed the Inflation Reduction Act into law on August 16, 2022. This is why it’s crucial for members of the solar industry.
The Inflation Reduction Act Increases Domestic Manufacture and Production
The solar industry is dependent on China to provide the essential components. China’s contribution to the global solar market is over 20%, leaving us in the U.S. vulnerable to China’s production, manufacturing, and economic capabilities. If there is a problem with any of these, as has been happening recently this year, it could cause problems for our solar community.
The new law opens the pathway to increase manufacturing and production in the U.S. The government provides incentives in tax credits to encourage businesses to maintain production and manufacturing within the U.S. soil for solar panels and cells, as well as other parts that include storage systems for energy. Additionally, the Inflation Reduction Act pulls down an appropriation of $500 million of the Defense Production Act to spur solar technology production in the U.S.
The IRA Extends Tax Savings to Homeowners
It’s not just the U.S. technological solar sector that isn’t the only one to gain from the law’s changes. You can, too! It’s possible! American Clean Energy Support tax credit was initially set to expire at the close of 2022. However, the IRA prolongs the savings for an additional ten years. If you’ve thought about installing solar panels, the 30% investment tax credit could help you save significant money.
The Inflation Reduction Act Promotes Clean Energy for Rural Communities
Rural communities are benefited from the IRA, which aims to increase resilience and improve the reliability of electricity. The law offers funds for renewable energy projects, which include:
Rural energy cooperatives can use the funds to switch to renewable energy sources, and the possibility to gain direct tax credits to pay to promote clean energy
The program has been given a boost in funding. Rural Energy for America Program offers grants and loans guaranteed for renewable energy projects on farms and in rural communities.
Tax credit for solar production or solar project installations within regions where coal-powered power or mining plants have shut down or dismissed workers due to the demise of the fossil fuel industry.
These measures aid in the transition of rural America to renewable, sustainable energy sources for greater energy independence and affordability.
The Inflation Reduction Act Gives Hope for the Future
Unbound Solar is proud to be a part of the celebration. Unbound Solar, we join all in the solar industry to cheer the passing of the Inflation Reduction Act! We’re dedicated to doing our part to help America in its journey toward renewable energy. When you choose to work with us, we’re a long-term partner for all your solar requirements. Look at our sales on mostly U.S.-sourced top-of-the-line solar systems to reduce your installation costs more.