On July 27, Senators Joe Manchin and Chuck Schumer announced a reconciliation deal they’re now calling the “Inflation Reduction Act of 2022” that includes about $370 billion in energy and climate spending, according to Politico.
The Inflation Reduction Act includes a 10-year extension of the solar ITC at 30% and may include direct pay for nonprofit entities. According to ROTH Capital Partners, the ITC could reach 50% for larger projects depending on domestic product use and project location. The U.S. Energy Information Administration released a report today that found extending the ITC through 2050 would increase solar generation by 10%.
The reconciliation bill also introduces a 30% ITC for standalone storage, which the industry has been pushing for to reduce the cost of this crucial technology. Manufacturing credits for solar cells (4¢/W) and modules (7¢/W) made the cut too.
“Inflation and energy are top of mind for Americans, and we have maintained that lawmakers must stay at the negotiating table and cut a deal on federal clean energy investments to help bring down the cost of electricity for homes and businesses,” said SEIA president and CEO Abigail Ross Hopper in a statement. “With long-term incentives for clean energy deployment and manufacturing, the solar and storage industry is ready to create hundreds of thousands of new jobs and get to work building out the next era of American energy leadership. This is a crucial window of opportunity that we cannot miss, and now Congress must seal the deal and pass this legislation.”
The bill is expected to reach the Senate floor next week.
