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Inflation Reduction Act Signed into Law - Enerlogics Networks, Inc. Inflation Reduction Act Signed into Law - Enerlogics Networks, Inc.

Inflation Reduction Act Signed into Law

Our excitement on the Inflation Reduction Act is driven heavily from the project perspective. But there is real meaningful policy that will drive manufacturing in the US as well.

The Inflation Reduction Act (IRA) was signed into law on Tuesday 8/16/2022. The IRA has some key now higher tax credits for solar and energy storage.

Most beneficial for solar projects:

  • Investment Tax Credit (ITC) increases from current 26% to new 30% with size OR prevailing wage & apprenticeship requirements
  • Additional 10% ITC available with domestic content minimums
  • Additional 10% ITC available in qualified energy communities (generally brownfields or former coal areas) or in low income areas

Thus projects could receive as much as a 50% investment tax credit, which would lower the delivered project cost.

Most beneficial for energy storage projects:

  • New standalone Investment Tax Credit (ITC) of 30%
  • Additional 10% ITC available with domestic content minimums (we have an option that would comply)
  • Additional 10% ITC available in qualified energy communities (generally brownfields or former coal areas) or in low income areas

Thus projects could receive as much as a 50% investment tax credit, which would lower the delivered project cost.

Direct Pay Option for Tax Exempt Entities:
Additionally, the tax credits have a “direct pay” provision that allows tax exempt entities to receive direct payment of the Investment Tax Credit

The $369 billion in climate and energy funding in the Inflation Reduction Act isn’t just the biggest-ever U.S. investment in combatting climate change. It also promises to deliver for the first time a comprehensive U.S. clean energy industrial policy — a plan to transform the country from a laggard to a leader in making the technologies vital to combating climate change.

Read more at www.seia.org/research-resources/inflation-reduction-act-solar-energy-and-energy-storage-provisions-summary

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