Written by We have received many questions about the Inflation Reduction Act (IRA) and what it means for clean energy in Alaska. The IRA is the most significant investment in power that the country has ever seen and charts a path for a decade of growth in solar and clean tech. Let’s analyze what exactly this means for Alaskans.
Here are the solar-specific provisions:
- 30% home solar tax credit.
- 30% business solar tax credit.
- 30% battery storage tax credit.
- 30% community solar tax credit with 20% affordable housing and 10% low-income bonuses.
- Direct pay 30% tax credit for non-profits, churches, cooperative utilities, and Alaska Native Corps.
- The ability to trade and sell solar tax credits.
- A solar production tax credit of $0.014 per kWh for qualified facilities.
Expanded details below
Lower Energy Costs: efficient appliances, home upgrades, and utility savings.
- Rebates that cover 50-100% of new electric appliance costs.
- Rebates for increasing energy efficiency.
- Tax credits of 30% of the cost for home solar installations and battery storage (for ten years) without income limits (residential clean energy tax credit). (this is available to any project installed in 2022)
- Tax credits of 30% of the cost of community solar – with additional credits of 20% for affordable housing projects and 10% for projects in low-income communities.
- Direct pay of the 30% tax credit (ITC) for non-profits, churches, cooperative utilities, and Alaska Native Corps in the form of cash.
- The ability to trade and sell solar tax credits.
- A solar production tax credit of $0.014 per kWh for qualified facilities.
- Grants to help state and local governments adopt the latest building energy codes – that translate into 29.2% savings for the average Alaskan home ($1,941 annually).
Good-paying jobs: for wind, solar, storage, and other clean tech industries.
- Tax credit bonuses for businesses if the solar company you use pays prevailing wage to their employees.
Domestic Manufacturing: boosting local clean energy production and supply chain.
- Through the new Advanced Industries Deployment Program, new manufacturing capacity in solar, wind, storage, and transportation technologies will better help position Alaska in the global clean energy boom.
Small Businesses: 99% of the Alaskan workforce.
- Building owners can receive a tax credit of up to $5 per square foot for energy efficiency improvements.
- The 30% investment tax credit for solar (mentioned above). (this is available to any project installed in 2022)
Electric Vehicles: newly created tax credits for buyers.
- Discounts of $7,500 for new and $4,500 for used electric vehicle purchases.
- The Bipartisan Infrastructure Law includes funds for building a state-wide charging network.
Cleaner Air: healthier people.
- A Clean Energy and Sustainability Accelerator will prioritize emissions-reducing projects in disadvantaged communities.
Rural Opportunities: climate-smart agriculture.
- Alaska’s 1,050 farms will be able to lead on climate solutions and stewardship.
- Electric co-ops will have access to direct-pay tax credits for the first time.
- Investment in electric co-ops improves resiliency, reliability, and affordability through clean energy and power system efficiency upgrades.
Resilient Communities: boosting affordable housing.
- Upgrades to flood-proofing, storm resilience, clean energy, and electrification through the newly created Neighborhood Access and Equity Grant Program.
- Funding for wildfire prevention and tree planting projects.