- The U.S. Senate passed the Inflation Reduction Act, a $430 billion climate, tax and healthcare bill, over the weekend
- The climate initiative includes long-term solar and storage tax incentives and investments in domestic solar manufacturing
- The proposed Investment Tax Credit (ITC) increases that tax credit from 26 to 30 per cent for projects completed in 2022
- The solar ITC has helped the U.S. solar industry grow by more than 10,000 per cent since it was implemented in 2006
Solar Alliance Energy (SOLR) has provided an update on the Inflation Reduction Act, a $430 billion climate, tax and healthcare bill passed by the U.S. Senate on August 7th.
The climate initiative includes long-term solar and storage tax incentives, investments in domestic solar manufacturing and other provisions that will help decarbonize the electric grid with significant clean energy deployment.
SOLR CEO Myke Clark commented on the news.
“The U.S. Senate has passed a transformative piece of legislation that will provide climate benefits for generations. The legislation includes several initiatives that will provide long term stability and incentives to the U.S. solar industry. This includes an increase to, and extension of, the investment tax credit for solar and a more flexible structure for companies like Solar Alliance to monetize that tax credit. These two key proposals have the potential to accelerate Solar Alliance’s growth, support our ability to own and operate solar projects and contribute to the strengthening of the economy through clean energy project deployment.”
The current Investment Tax Credit (ITC) is a 26 per cent tax credit for solar systems. The proposed legislation increases that tax credit to 30 per cent for projects completed in 2022 and extends the ITC another ten years, providing a strong long-term signal to the solar industry.
According to the Solar Energy Industries Association, the solar ITC has helped the U.S. solar industry grow by more than 10,000 per cent since its implementation in 2006, with an average annual growth of 50 per cent over the last decade alone. Under the proposed legislation, starting in 2023, companies would be allowed to sell most energy-related tax credits to other companies without having to resort to complicated tax equity structures. For the type of projects Solar Alliance is developing, this provision could reduce transaction costs and simplify the process of monetizing tax credits.
The Senate vote means the legislation now moves to the House of Representatives for approval before being put in front of President Biden for his signature.
“This climate initiative is aimed at reducing greenhouse gas emissions by 40 percent below 2005 levels by 2030 through a series of initiatives that would directly benefit solar consumers. This legislation aligns perfectly with our growth strategy and will help support jobs and clean energy deployment in the U.S.,” concluded Clark.
Solar Alliance is an energy solutions provider focused on commercial and industrial solar installations. The Company operates in Tennessee, Kentucky, North/South Carolina and Illinois and has an expanding pipeline of solar projects in the United States.
Solar Alliance Energy (SOLR) opened trading at C$0.135.