The solar industry experienced significant growth in the residential sector during the first quarter of 2022, contributing 1.2 GWdc power to the grid. However, other segments faced challenges due to supply chain issues. Solar installations made up about half of the new capacity added to electricity generation in the same quarter. Despite industry predictions of an overall decline, solar is anticipated to rebound to 2021 levels by 2024.
Even with the rapid expansion of solar energy, it’s crucial to enhance production and manufacturing in the U.S. to meet the administration’s goal of achieving 100% clean energy by 2035. There is optimism on the horizon, as President Joe Biden is set to sign the Inflation Reduction Act into law on August 16, 2022. Let’s explore why the solar community sees this as a significant development.
The Inflation Reduction Act Increases Domestic Manufacture
The solar industry heavily relies on China for crucial components, with China contributing over 80% of the global supply. This dependence makes the U.S. vulnerable to disruptions in China’s manufacturing, production, and economy. Any issues in these areas can pose challenges for the U.S. solar community.
The new law provides an opportunity to boost domestic production and manufacturing. The government is offering tax credits to incentivize companies manufacturing solar panels, cells, and other components within U.S. borders, including storage systems.
The IRA Extends Tax Savings to Homeowners
The new law doesn’t just benefit the U.S. solar technology industry; it can benefit you too! The American Clean Energy Support Tax Credit, which was initially set to expire in 2022, has been extended for an additional 10 years through the Inflation Reduction Act (IRA). This extension means that the 30% investment tax credit could save you a significant amount of money if you were considering solar installations.
The Inflation Reduction Act Promotes Clean Energy for Rural Communities
The IRA is a significant benefit to rural communities as it focuses on enhancing electricity reliability and resilience. The law provides financing for clean energy projects, offering direct pay tax credits for rural energy cooperatives aiming to shift to renewable energy sources. Moreover, it allocates increased funding for the Rural Energy for America Program, which provides grants and guarantees loans for renewable energy projects in farms and rural communities. Tax credits are also available for solar manufacturing projects and solar installations in areas affected by the decline in fossil fuel industries, such as coal mining. These measures aim to assist rural America in transitioning to renewable energy, promoting greater energy independence and affordability.
The Inflation Reduction Act Gives Hope for the Future
ESD Solar proudly joins the solar industry in celebrating the Inflation Reduction Act. We are dedicated to supporting America’s shift to cleaner energy. When you choose us, you gain a lifelong partner for all your solar needs. Benefit from our sale on top-tier U.S. solar systems for even more affordable installation costs.
This post was written by Daniel Massaad, owner and expert solar technician at Energy Solutions Direct! ESD is the top choice for Solar Panel Installation Lakeland FL! Our licensed and certified contractors are masters of their craft; with years of experience servicing the great Tampa Bay area and beyond, the choice is simple. ESD excels at offering you the best in solar value!
