Today, the President signed the Inflation Reduction Act of 2022. Among (many) other things, the Act provides new and expanded tax credits or rebates for consumers purchasing solar, energy storage, electric vehicles, EV chargers, and high efficiency electric appliances.
30% Tax Credit for Residential Solar
The Inflation Reduction Act increases the tax credit for residential solar installed in 2022 from 26% to 30%. The credit continues at 30% for another 10 years.
If Certasun installed a system for you earlier in 2022, you will likely be eligible for the 30% credit even if the credit was 26% at the time you purchased or we installed your system. Lucky you!
If we have yet to install your system, you should be eligible for the 30% credit regardless of whether we install your system later this year or in 2023.
Ready to find out if solar makes sense for you? Sign up for a free on-line consultation and we’ll give you the numbers for your home.
(Inevitable disclaimer: We are not your tax advisor; only you or advisor can confirm your ability to use this credit or the ones we describe below.)
Increased and Clarified Tax Credit for Residential Energy Storage
The Inflation Reduction Act also increases the tax credit for battery energy storage systems to 30%. Previously, the tax code was understood to provide a credit for energy storage paired with solar. However, the IRA explicitly calls out storage as being eligible for the 30% credit.
Let us know if you are interested in backup power in conjunction with your current or a new Certasun solar system!
Renewed Credits for EV Chargers
The IRA also “recharges” the Alternative Fuel Refueling Property Credit. (We just call it the EV charger credit.) This credit expired at the end of 2021 but is now extended through 2032 for customers who live in census tracts the federal government defines as low-income or rural. If you installed an EV charger in 2022 or install one through 2032, you may be able to claim a credit of 30% of the cost, up to $1,000.
Learn more about our EV charger installation services.
Tax Credits for Electric Vehicles
The Inflation Reduction Act also makes changes to the tax credits for electric vehicles themselves. Basically, if you want a medium-priced EV made in the USA and you have a medium income, you’ll be very pleased. You may be eligible for a credit of $7,500 applied against the purchase price from your dealer.
The law removes the previous limitation on the number of vehicles from a particular manufacturer that were eligible for the credit. Tesla and GM had previously reached this limit, so those companies’ vehicles are now eligible.
However, the credit is not available for sedans priced over $55,000 or SUVs or pickups priced over $80,000. Maybe not such good news if you want a Lucid sedan, Mercedes SUV, or Rivian pickup. The credit is also not available for vehicles assembled outside North America or to purchasers with incomes over $150,000 ($300,000 for joint filers). Finally, starting in 2024 the amount of the credit is reduced for vehicles where the minerals used in the batteries or the battery components are not sourced domestically.
The Act also provides a credit of 30% of the sale price of a previously-owned EV, up to $4,000. You must purchase the vehicle from a dealer for no more than $25,000. This credit is limited to taxpayers with incomes up to $75,000 ($150,000 for joint filers).
High Efficiency Electric Home Rebates
The Act also provides federal funding for states to implement rebate programs to offset the cost of upgrading homes to use high efficiency electric appliances, including heat pump water heaters, clothes dryers, and heating and cooling systems. Electric cooktops, stoves, ranges, and ovens are also covered. The rebates can be 50-100% of the cost, although they will be available only to homeowners with incomes up to 150% the median income in their area. We’ll provide more information when we know how Illinois and Wisconsin plan to implement these rebates.
Contact Us for More Information
We would love to tell you more about how these benefits work – as well as the Illinois and Wisconsin incentives or solar and EV chargers. Set up a completely free on-line consultation.