by Christian Roselund
In a surprise turn of events, on July 27 Senator Joe Manchin announced that he has reached a deal with Senate Majority Leader Chuck Schumer on clean energy tax legislation. Given Manchin’s newfound cooperation, this legislation is likely to become law in September. The Inflation Reduction Act (IRA) features provisions related to solar, wind and energy storage tax credits, as well as U.S. solar and wind manufacturing.
This includes the following:
• Solar Investment Tax Credit (ITC) for businesses returns to 30% for projects that begin construction through the end of 2024: The full 30% is contingent on labor provisions o Energy storage 5kWh and larger becomes eligible for the ITC; An additional 10 – 20% ITC (to reach 40%-50% of project costs) is available for certain projects in low-income communities
• ITC for residential solar is extended for 10 years through the end of 2032