You could offset up to 70% of renewable energy costs with the expanded Investment Tax Credit (ITC) of the Inflation Reduction Act (IRA). Navitas can assist you in utilizing IRA incentives to speed up the adoption of clean energy technologies, like solar.
What is the Investment Tax Credit (ITC)?
The Investment Tax Credit (ITC) is a federal incentive designed to promote the installation and use of renewable energy systems, primarily solar energy but also including certain Heating and Air Conditioning Systems. The ITC allows businesses and public entities to receive a direct payment from the IRS to help offset the cost of these systems.
Maximizing the ITC with Bonus Credits
The IRA introduces bonus credits to boost the ITC up to 70%, further enhancing the financial attractiveness of solar projects:
- Energy Communities Bonus: An additional 10% credit is available for projects located in designated energy communities, or areas economically impacted by the decline of fossil fuels. This bonus supports local economies and fosters job creation in transitioning regions.
- Low-Income Communities Bonus: Solar installations in low-income communities, or on properties serving low-income populations, can qualify for an extra 10 to 20% credit, ensuring the benefits of solar energy extend to underserved areas.
- Domestic Content Bonus: Projects using domestically manufactured materials can earn an additional 10% credit. This bonus supports American manufacturing and strengthens the domestic supply chain for renewable energy components.
Benefits for Public Entities
Public entities such as schools, municipalities, and other non-profits, which typically do not pay federal taxes, can benefit from the ITC through direct payments from the IRS. By filing a tax return, these entities can receive the ITC value as a cash payment, making renewable energy projects accessible. This provision ensures public entities can participate in the clean energy transition without being excluded due to their tax-exempt status.
How Navitas Can Help?
Navitas specializes in guiding clients through solar investments to maximize ITC benefits:
- Project Assessment: We conduct thorough evaluations to identify the most advantageous solar solutions for your needs, taking full advantage of available tax credits and incentives.
- Electric Rate Analysis: It is important to understand your electric utility rate to determine the true financial benefit of these types of installations. We see the same solar size and layout can have drastically different paybacks (between 7-25 years) depending on the electric rate and the electric profile in each building.
- Planning and Implementation: Our team will develop, and implement, a tailored strategy aligning with your financial, infrastructure, and sustainability objectives. We manage every aspect of the project, from initial planning to final installation.
- Compliance and Documentation: We handle all necessary compliance requirements and documentation ensuring you qualify for the ITC and applicable bonus credits, minimizing administrative burdens.
- Support and Maintenance: Post-installation, we provide ongoing support and maintenance services to ensure your solar systems operate at peak efficiency, maximizing your return on investment.
The Inflation Reduction Act’s ITC and bonus credits present a unique opportunity for solar investments, which can potentially offset up to 70% of costs. At Navitas, we are dedicated to helping you navigate these incentives and achieve your sustainability goals.
Contact us at 913-344-0049 to maximize your investment with the power of solar energy.