Three big things happened for residential solar buyers in August 2022. Firstly, the Inflation Reduction Act, which was passed into law, increased the federal solar tax credit to 30%. Secondly, the revised tax credit would now cover your electric vehicle chargers too, effectively shaving 30% off your cost on EV chargers. Thirdly, battery storage equipment above 3 kWh capacity is now eligible for tax credit.
The Biden administration hopes to spur a new wave of investment from homeowners into green energy technology with the Inflation Reduction Act, and it appears they’ve selected the right areas to focus on.
Here’s why these changes matter to Bridgewater, NJ homeowners.
Average Additional Savings of Up To 4%
Prior to the passing of the Inflation Reduction Act, the solar tax credit was being phased out in 2023 in a staggered manner. During the 2020-2023 period, it dropped from 30% to just 26%, and subsequently, in 2023, it was set to be reduced to 22%, before being discontinued from the beginning of 2024.
Bridgewater homeowners who missed their opportunity to go solar before 2020 were regretting their decision until now. Skyrocketing inflation and punishing utility bills have wreaked havoc on the budgets of households in Bridgewater.
For them, restoring the federal tax credit to 30% offers an enormous incentive to go solar today. If they were ever waiting for a sign to go solar, this is it! The best part is that even solar buyers who installed their PV system in 2022 and have not yet claimed the tax credit can avail of this rebate.
To understand the impact of this change, let’s consider the average household in the US. An average household requires a PV system worth somewhere around $25,000. Were you to buy your system under the original federal tax credit regime, you’d have received a rebate of only 26%, amounting to $6,500 in 2022, and 22%, amounting to $5,500 in 2023.
In contrast, you can now receive a $7,500 rebate on your $25,000 PV system, effectively reducing your out-of-pocket expense to $17,500.
Install Future-ready Equipment
If you were ever planning to shift to EVs, then this would be the right time to invest in an EV charger. You may qualify for a flat 30% rebate on the cost of your EV charger up to $1,000Also, you can now install battery storage with capacities above 3 kWh alongside your solar system and get up to a 30% rebate on its price too. These are some excellent incentives for Bridgewater homeowners to go solar in 2022.