The Revolution Will Be Incentivized: How The IRA Is Boosting Solar, Storage, and EV Adoption
The Inflation Reduction Act: Believe The Hype
According to one strategist, the solar and storage industry has entered a new era. The Inflation Reduction Act (IRA), signed into law last August, aimed to redesign corporate taxation, boost American manufacturing, and confront the climate crisis. Almost one year later, the impact on renewable energy has been even greater than experts had predicted.
Since the IRA was signed, nearly 100 gigawatts of clean energy have been announced - totaling more than $150 billion in capital investment. That’s more than what was invested in clean energy between 2017 and 2021, combined. Throw 1,000 gigawatt-hours of battery manufacturing in the pipeline, and you’ve got a red-hot clean energy market. That’s enough to deliver more than 10 million electric vehicles per year. The hype about increased ROI, shortened payback periods, and operational savings is real, and businesses can hop on the IRA bandwagon to reap the financial benefits of solar, storage, and electric vehicle upgrades - not to mention cutting their carbon footprint.
Good News for Businesses
Solar under the IRA
The same incentives major developers are leveraging to expand their portfolios are available to businesses looking to install renewable energy technologies at their facilities. The IRA makes a 30% Investment Tax Credit (ITC) available to businesses that install solar energy systems through 2025, as long as the system is owned by the business through either outright purchase or a loan. In 2025, the Department of the Treasury will decide whether to continue the ITC for commercial systems, meaning the best time to go solar is now!
By incorporating solar into their building’s energy supply, businesses can see both economic and environmental benefits - reducing both their dependence on the electric grid and their carbon footprint. Businesses that do install a solar energy system can save an average of 89% on their electricity bills - and can knock 30% off the cost by taking advantage of the ITC.
Storage under the IRA
If your business is looking to improve its energy resiliency in the face of grid-threatening events like wildfires and storms (which are becoming increasingly powerful and frequent, thanks to climate change), the ITC can also be used to cover an energy storage battery system. This technology acts as a reservoir of energy, which can be charged up for use during periods of high demand, or when your solar system isn’t producing enough to cover your bases. Thanks to this, businesses can avoid costly demand charges, which are components of your electricity bill that are associated with your peak electricity usage. These charges sometimes comprise more than 70% of your electricity bill, making an energy storage battery an incredibly valuable asset for your business.
Electric Vehicles under the IRA
Businesses can even leverage the IRA to help with the cost of electrifying their fleets. Under the IRA, consumers can qualify for a tax credit worth up to $7,500 for an electric vehicle less than 14,000 pounds, or up to $40,000 for an electric vehicle over 14,000 pounds. However, the vehicle will have to meet certain domestic manufacturing requirements.
Momentum Worth Riding
Almost one year after the Inflation Reduction Act was signed into law, experts and analysts are surprised at the momentum it has given the renewable energy industry. From utility-scale down to commercial systems, solar energy is more appealing than ever before, and the proof is in the pudding - 18,000 new jobs, $150 billion in investment, and $4.4 billion in customer savings. The time to hop aboard is now! The renewable revolution is just getting started, and Promise is here to guide you along the way.
Our Holistic Approach
Promise Energy understands that every business operation has unique needs, especially when it comes to solar and storage. Promise’s holistic approach to energy is what differentiates us from the crowd, and you can count on our energy experts to custom-design a system to meet the unique energy needs of your business.
Ready to see how your business can go solar with the incentives in the IRA, and set you up for economic and environmental success? Contact Promise Energy at info@promiseenergy.com for a complementary evaluation.
At Promise Energy, we don’t believe that one size fits all. We pride ourselves in designing and installing customized energy solutions that provide the greatest long-term value and energy control for our customers.