What the new Inflation Reduction Act guidance means for solar developers
As momentum for community solar continues to grow nationwide, this week brought even more good news from the landmark Inflation Reduction Act. The Treasury Department unveiled their final guidance for a new Low-Income Economic Benefits Project tax credit — and we’re thrilled about what it means for the community solar landscape.
Our co-founder and CEO Kiran Bhatraju put it best: "Now that we know the rules of the road for the IRA's low-income tax credits, I'm more optimistic than ever that this is a game-changer for the community solar industry. The final guidance incorporates best practices from existing state markets, while also allowing for industry innovation. With this support, Arcadia is ready to bring the benefits of community solar to millions of low-income families all across the United States."
Here's the scoop on what’s in the new rules, and specifically what they mean for solar developers looking to build new projects and bring solar power to more local communities.
More clean energy investments in underserved communities
The new program rules continue the Biden Administration’s goals of expanding clean energy to more communities across the country. According to Deputy Secretary of the Treasury Wally Adeyemo, “This new bonus incentive…will drive investment to underserved communities to ensure they benefit from lower energy costs and reduced pollution and health hazards.” These solar-powered Low-Income Economic Benefits Projects will open the clean energy future to everyone.
Aligned with best practices (and Arcadia's market-leading capabilities)
For solar developers, it’s valuable to know that the final guidance requires a number of processes and models that Arcadia already uses. For instance, the Treasury Department has adopted income verification rules, savings calculation methodologies, and subscriber allocation processes that Arcadia is already using today. We’re ready to be the partner for any solar projects that are looking to tap into this new program.
Accelerated action: time to start applying
We’re impressed by how quickly the Treasury Department is moving to allocate these tax credits. The latest indication is that a 30-day application window will open in the early fall. And since this program will almost certainly be over-subscribed, solar developers should aim to have your application in by the end of September. We’re ready to help you with required attestations, and all of the compliance requirements that will follow.
This guidance continues to accelerate our path towards a clean energy future, and solar for all. Let's keep making the most of the Inflation Reduction Act, one solar project at a time.
Interested in partnering with Arcadia on your solar project? Get in touch with our team today.