The Inflation Reduction Act has brought a wave of change for businesses across Alaska, particularly in the realm of renewable energy. A key component of this Act is the Energy Community Bonus, which provides a significant boost to businesses looking to transition to solar power. Coupled with the USDA REAP grant, businesses outside of Anchorage can cover almost all costs associated with a solar PV system. Let’s delve into the details.
The Energy Community Bonus
The Energy Community Bonus is a provision in the Inflation Reduction Act that allows all Alaskan businesses to receive a 40% Investment Tax Credit (ITC) for solar installations (30% standard and then up to a 10% bonus for using a prevailing wage paying contractor). ASV has been paying prevailing wage from the beginning! This is a significant increase from the previous 26% credit, making solar power more accessible and affordable for businesses across the state (including Anchorage).
The USDA REAP Grant
But the financial incentives don’t stop there. The USDA Rural Energy for America Program (REAP) provides grants for up to 50% of the total system cost for businesses in rural areas. This means that businesses outside of Anchorage can couple the Energy Community Bonus with the USDA REAP grant to cover almost all costs associated with a solar PV system.
The Impact on Alaskan Businesses
What does this mean for Alaskan businesses? It means that solar power is now more affordable than ever and incentives alone can cover up to 90% of cost. That’s incredible! With the Energy Community Bonus and the USDA REAP grant, businesses can significantly reduce the upfront costs of installing a solar PV system, making the switch to renewable energy a financially viable option.
Moreover, by transitioning to solar power, businesses can lock in their energy costs and protect themselves from future energy price hikes. This is particularly relevant in Alaska, where energy prices are increasing at 6% a year and inflation is at 10%.
The Energy Community Bonus in the Inflation Reduction Act, coupled with the USDA REAP grant, provides a golden opportunity for Alaskan businesses to transition to solar power. By taking advantage of these incentives, businesses can not only reduce their energy costs but also contribute to a more sustainable future for Alaska.