Inflation Reduction Act

đź’ˇ What Is the Inflation Reduction Act?

The Inflation Reduction Act (IRA), signed into law in 2022, is a landmark U.S. policy designed to lower energy costs, reduce carbon emissions, and accelerate the transition to clean energy. For homeowners, it offers powerful financial incentives to adopt solar energy — making it more affordable than ever.

 

đź’° What Solar Benefits Does It Offer?

Thanks to the IRA, homeowners can now claim a 30% Federal Solar Tax Credit on eligible solar purchases and installations. This means:

  • You can deduct 30% of the total cost of your solar system from your federal taxes.
  • This includes solar panels, batteries, inverters, installation fees, permitting, and more.
  • Example: If your solar system costs $12,000, you could receive a $3,600 tax credit.

 

🏠 Who Qualifies?

You may be eligible if:

  • You own the solar system (not leasing).
  • It’s installed on your primary or secondary U.S. residence.
  • The system is new and not previously used.
  • You have sufficient federal tax liability to claim the credit.

 

đź“… Timeline to Act

  • The 30% credit is available from 2022 through 2032.
  • It drops to 26% in 2033 and 22% in 2034.
  • After 2034, the residential credit may expire — so now is the best time to go solar.

 

🧾 How to Claim the Credit

  1. Keep all receipts and documentation.
  2. File IRS Form 5695 with your federal tax return.
  3. Consult a tax advisor if needed.

 

🌿 Why It Matters

The IRA makes solar energy not just environmentally smart — but financially smart too. With lower upfront costs, long-term energy savings, and increased home value, switching to solar is one of the best investments you can make.