Solar and Energy in the Inflation Reduction Act
Aug 8, 2022 – Science Friday on Friday described the gains anticipated in this new Climate Change legislation:
Residential Tax Credit Changes
Credit for Residential Clean Energy (25D)
- Extends credit through 2034 for residential solar, wind, geothermal, and biomass fuel.
- Maintains the previous credit rate but adjusts the project dates. Applies a 30% credit for projects started between 2022 and 2032. Credit decreases to 26% for projects started in 2033 and 22% for projects started in 2034.
- Expands eligibility to battery storage technology.
Credit for Energy Efficiency Home Improvements (25C)8
- Extends credit for energy efficiency home improvements through 2032.
- Increases credit from 10% to 30%.
- Replaces lifetime cap on credits with a $1,200 annual credit limit, including $600 for windows and $500 for doors. Increases limit to $2,000 for heat pumps and biomass stoves. Removes eligibility on roofs.
- Updates language to reflect advances in energy efficiency.
- Expands credit to cover the cost of home energy audits up to $150 and electrical panel upgrades up to $600.