The Inflation Reduction Act and Its Impact on C&I Solar
To the right is a brief overview of what Solaris Energy currently knows about the passing of the Inflation Reduction Act and its impact on our business process with our partners. As additional guidance and information becomes available we will update this page, continue to communicate, and spread the benefits.
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If you have any questions please contact us.
UPDATE: The Department of Treasury released initial guidance for prevailing wage and apprenticeship requirements.
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Watch our summary video for more information:
If you are a member of SEIA, we also encourage you to read through their detailed description:
Solaris Energy and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
the Investment tax credit
BEFORE
26%
w/ Step Down
AFTER
30%*
For 10 Years
WHAT THIS MEANS
We will be able to provide a better rate for our Power Purchase Agreements and spread the benefits.
*The details
< 1 MWac
Project Size
≥ 1MWac
30% ITC
Guidance from
Treasury Released
Meets "Under Construction" Requirements by January 30, 2023
Meets Requirements
Prevailing Wages & Apprenticeships
6% ITC
Doesn't Meet Requirements
Doesn't meet "Under Construction" Requirements by January 30, 2023
WHAT THIS MEANS
If you're an installer and we're working on a project with you that is below 1MWac in size (majority of our projects) or we meet "Under Construction" requirements before January 30, 2023 then we can proceed. Down the road we will work together to ensure we meet the requirements for bigger projects, which may mean adjusting our EPC contract.
"Under Construction"
=
Physical Work Test
Safe Harbor at 5%+
or
5
The ITC will cover interconnection costs for projects under 5MWac
is the magic number...
WHAT THIS MEANS
Previously interconnection costs were not covered by the ITC. This will help reduce overall project costs and improve numbers for investors.
BONUS TIME
In addition to the 30% ITC, some project have the opportunity to earn 10-20% more ITC.
Domestic
Content
+10%
Energy Communities
+10%
Low-Income Communities
(application required)
+10 - 20%
WHAT THIS MEANS
If you have a project that fits into one of these categories, including proof of USA iron/steel & manufactured products, we may be able to increase the financial benefits for the host site, installer, and investors.