Important Details For Solar's “Domestic Content” 10% Bonus Tax Credit (Inflation Reduction Act)
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- เผยแพร่เมื่อ 17 พ.ค. 2023
- In this video, Dale and Warren discuss the recently released IRS guidance for the 10% domestic content Investment Tax Credit (ITC) adder for solar panel systems. The domestic content adder is part of the Inflation Reduction Act.
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Additional Resources:
▶ What's in the Inflation Reduction Act: • Is the Inflation Reduc...
▶ The Cost of Solar Panels in 2023: • The Cost of Solar Pane...
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Is this for the typical homeowner or business owners creating large projects
No, it's only available for commercial installations. The residential tax credit is a straight 30%.
Hi,
Very grateful for you. Does this law apply to the 2nd home as well?
Thank you
The tax credit is dependent on the tax liability of the solar system owner. It’s available if the owner has the necessary liability regardless of the number of systems installed.
Thanks for watching!
Dale, great summary! Are you aware of any carve outs from the domestic content requirements to date? Like waivers?
There is language that allows for a waiver if the domestic content requirement boosts costs by more than 25%. However, we have not been made aware of how this process would work and how you would validate the cost differences. So we are not aware of the details of any waiver process.
@@thesolarenergychannel Thank you for the timely response, this is very helpful!
@@ib1140 You're welcome! Thanks for watching.
Thank you for this initial analysis. My question is, in order to be eligible for this extra bonus, do projects need to meet both conditions? 100% American-made steel and fulfill the 40% component requirement? Or is the overall cost of components and raw materials taken into account in the end?
Both requirements need to be met to receive the 10% adder.
Thanks for watching!
@@thesolarenergychannel Thanks a lot, for answering my question !!😀
@@fersierrain You're welcome!
Is the 10% domestic credit eligible for residential solar customers?
Not currently. The residential tax credit is 30% across the board.
@@thesolarenergychannel Wait. Is the 10% energy adder and 10% or 20% low income adders also not available for residential customers? Where is the language for that? What about for non-profits? Does this potentially make leases or power purchase agreements way more attractive for homeowners, since the company or possibly a non-profit could be the owner of the system for a number of years to reap the additional tax equity?
@@nlewis1111 Great questions.
The residential tax credit is 30%. None of the adders apply to homeowners.
Leasing companies typically can take all the commercial solar benefits, even though they may be installing on residential properties. So yes, they can take the adders and depreciation. That’s the main con to the leasing - the leasing company takes all the tax benefits, and the homeowner is stuck with the payments. Watch this video for the pros and cons of leasing - th-cam.com/video/zV1iwTGJzmI/w-d-xo.html
Nonprofits can now take advantage of a direct payout for all or a portion of the tax credit. In 2023, they can take the full 30% and the 10% bonus adders if the project qualifies. Here’s a video that explains the benefits for nonprofits - th-cam.com/video/mXXkNd7YGyg/w-d-xo.html
@@thesolarenergychannel Thanks for your response.
Couldn't a group of homeowners form their own pass through LLC to take advantage of all the adders and depreciation and then set up a sort of rent to own with themselves of other community members to transfer ownership back to the homeowners?
What would be the obstacles to such an arrangement?
Or maybe like a co-op structure? Surely there is a way for homeowners to take advantage of the same advantages as others?