The IRA and Solar Installers in San Diego

As this blog is written in the second week of August, 2022, the Inflation Reduction Act is on its path to becoming law. It will provide a huge boost to solar installation projects. This is outstanding news for both homeowners and solar installers in San Diego and Southern California. 

Great News for Homeowners and Residential Solar Installers in San Diego

The most obvious benefit to homeowners looking at installing solar panels will be the reinstatement of the Investment Tax Credit (ITC). The ITC provides a tax credit based on a percentage of the solar project cost. Currently, and about to increase, the ITC sits at 26% in 2022. It was set to drop to 22% in 2023. 

The Inflation Reduction Act (IRA) re-charges the ITC. Once the IRA passes, the ITC is set to be reinstated to 30% for 2022. This would be a retroactive move. This means homeowners who have gone forward with solar installers in San Diego will receive a higher tax credit. These ITC tax credits are not write offs, they are credits to apply to homeowner taxes. 

Great News for Businesses and Commercial Solar Installers in San Diego

The ITC returns to its full 30% tax credit for commercial installations. This is great news for Southern California businesses. The higher tax credit shortens the payback period on commercial solar projects. Therefore solar is even stronger for businesses that need to save on operating costs. Trading grid-produced energy for self-generated renewable energy creates a win for business owners and customers. 

Some Solar Installers, Such as HES Solar, Install EV Charging Stations

Business owners will also see options for new revenue streams. The Inflation Reduction Act provides funding for EV rebates. And as EV adoption increases, drivers need more charging stations. 

HES Solar is a top solar installer in San Diego and also a certified ChargePoint EV charging station installer. As part of energy cost savings, HES Solar can create EV charging stations that generate income and draw customers. For distribution centers, EV charging stations can energize a company fleet of EVs. 

Also, for homeowners, HES Solar will install a smart EV charging station. For homeowners who want to use their own charger, we will install a 220 volt outlet for fastest home EV charging. 

Great Boost for Solar Installers in San Diego

The political landscape has been tough for solar installers. The recent lockdowns have created more demand for home solar installation while California politics have largely worked against solar installers in San Diego and California in general. 

The rebuilt ITC helps solar installers in San Diego and throughout California. Customers get a larger up-front return on their investment. And this investment is unique. Building a solar project uses money that is leaving anyway. Therefore any money put into a solar installation is money that will benefit long-term. 

Businesses need a strong tax credit, too. Solar allows businesses to lower energy costs. Solar also allows businesses to stabilize energy costs. 

Inflation Reduction Act Provides More for Solar Projects

In addition to the 30% tax credit, the IRA allows higher tax credits for some systems. The new law rewards the use of  US-made solar project materials and equipment. Therefore, projects that qualify could earn an additional 10% tax credit. 

The IRA provides 20% for solar installations built in some low-income communities. 

10 Year Tax Credit Plan 

These changes are set to take effect retroactively to January 1 of 2022. After that, the solar tax credit is set at 30% for ten years. This is great news for solar installations on future construction. 

In total, the IRA will provide $369 billion in energy and climate change investment. This benefits homeowners and businesses. This is also a strong boost to the solar industry. And of course this is great news for solar installers in San Diego. 

This development makes it a great time to go solar for immediate return on investment, decades of energy cost savings, and a great way to lower the carbon footprint.

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NET ENERGY METERING 3.0 INFORMATION

Net Energy Metering 3.0 (NEM 3.0) is the incoming law created by the California Public Utilities Commission (CPUC). The new tariffs and fees will impact both residential and commercial solar systems built in California. 

As this notice is posted in November of 2022, the Proposed Decision from the CPUC outlining the proposed NEM 3.0 terms is expected soon. This comes after a year’s delay. Once the new agreement is finalized and passed into law, there will exist a designation of the deadline under which new systems will continue to qualify for NEM 2.0 rates. 

The new NEM 3.0 rates will be designed to lower the value of electricity during the daytime hours, when solar is producing, and increase the value of electricity during the evening hours, when solar homes and businesses purchase electricity. In short, NEM 3.0 will create a “sell low, buy high” proposition to new solar system owners. 

To Californians looking to install a solar system on their home or commercial building, the NEM 2.0 rates will be preferred. As of this post, the solar industry does not know the details of how different the NEM 3.0 rates will be from the NEM 2.0 rates. 

Please use the HES Solar website as a resource to learn more, and please take our offer to speak with an HES Solar Energy Consultant at no obligation.

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Robert Laverty

Senior Energy Consultant, Residential

Robert Laverty joined the HES team in the summer of 2018, bringing his ten years of solar design experience and his Bachelor’s degree from the University of Puget Sound with him. Robert is dedicated to finding solutions to help families produce and store electricity in order to reduce their reliance on grid power as well as help reduce their household’s carbon footprint. Robert’s experience as a newspaper editor as well as his involvement with the sustainability-focused Rocky Mountain Institute drives him to constantly seek out innovative ways to meet energy needs through renewable resources as well as helps him share those ideas with Southern California homeowners. When not at work or volunteering time with his church or community, Robert spends time with his wife and two sons or pursues his passion of fly fishing.
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