The US solar market size has grown exponentially over the past decade. Valued at around $14.21 billion in 2022, the country's solar market is expected to continue growing through 2030. Per the latest research, the solar energy market growth rate is slated to expand at a compound annual growth rate (CAGR) of 15.4% from 2022 until 2030. California tops the country with a solar energy market share of 30%.
With the historic passage of the Inflation Reduction Act (IRA) into law in August 2022, going solar is expected to become even more financially advantageous for American homeowners. The IRA is the largest federal policy aimed at combating climate change and decarbonizing multiple sectors of the economy.
The IRA came into being to combat inflation. It aimed to lower the cost of healthcare services, prescription drugs, and solar energy. And the law prioritizes promoting renewable energy as both an environmentally-friendly and cost-effective option.
According to the White House, the IRA was created to grant families and businesses economic incentives, health benefits, and energy savings. Under the IRA, the government expects massive solar market growth until 2030. This includes:
Now that we have a better idea of what the IRA hopes to achieve within the solar market (and the economy at large), let's take a closer look at how American homeowners can benefit from the legislation — and why the best time to go solar is now.
The reinstatement and extension of the federal solar tax are among the most significant benefits of the IRA. The ITC was also raised from 26% to an impressive 30% and extended for 10 years, making the forecasts about the solar market's growth more realistic.
Taxpayers who switch to solar power will receive almost one-third of their system price back when filing taxes after its installment. This makes transitioning into sustainable energy sources more cost-effective than ever.
Homeowners opting to install solar systems between 2022 and 2032 will be rewarded with a 30% deduction from their federal income taxes. Any additional tax credits accumulated before the installation may also be carried over into the following year.
Those who choose to invest in energy storage technologies will also enjoy a 30% tax credit on backup battery purchases, easing solar homeowners' financial burdens during their transition to solar.
In line with the federal government's commitment to bolster the solar market and speed up solar technology adoption, the IRA will also grant qualified taxpayers generous tax credits to purchase electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and EV charging stations.
The tax credits range from a minimum of $4,000 (used EVs and PHEVs) to $7,500 (new EVs and PHEVs). This is excellent news for drivers who want to contribute to the global fight against climate change and offset their fossil-fuel usage with renewably generated electricity.
The government aims to have 50% of all new car sales include electric models by 2030, and the generous tax credits will help speed up this adoption process. In addition, homeowners with electric vehicles can also be reimbursed for up to 30% of the costs of purchasing and installing an EV charger. Research shows that EV owners usually charge their cars at home 80% of the time, yet fail to mention the economical aspect behind it.
Homeowners that need to invest in home improvements before they can entirely switch to solar will be glad to know that a rebate of up $4,000 is in place with the Energy Efficient Home Improvement Credit.
The rebates will run up to $2,500 for electrical wiring and $4,000 for breaker boxes to help mitigate the costs of turning your home into a solar-friendly environment. Also covered under this credit are water heaters, heat pumps, ventilation upgrades, and smart appliances that are eligible for energy-efficiency credits.
Homeowners looking to switch to solar would do well to act now before the solar market gets too crowded and prices rise. Given the incentives that the IRA has put in place and the solar market pathways initiative, more and more people will switch to solar, inevitably causing prices to rise in the solar panels market. And if you wait too long, you may end up paying more for the same equipment!
So if you're looking to switch to solar energy, don't hesitate to contact AMECO Solar & Roofing. Our solar experts will be glad to take you through the process and help you switch to solar quickly and cost-effectively.
We offer end-to-end solutions that cover not only your solar but also your roofing needs, all with the help of a dedicated project manager that walks you through everything you'll need.
From initial inspections to solar panel installation, you can rest assured that your solar system will be properly installed. You will also get full access to all available government incentives.
To learn more about going solar, feel free to browse through our blog, where we cover a wide range of helpful topics, such as how a solar panel works, estimating your solar panel needs, and more. You can also check out our Instant Quote Calculator to get started on your solar journey today!