Colorado’s already booming solar industry found a new gear recently, boosted by the solar installation tax credits included in the Inflation Reduction Act (IRA), passed in August of this year.
Homeowners will enjoy several potential benefits. Here’s a breakdown:
New solar installations on homes
As always, before solar installation can commence, an energy analysis must occur, along with a roof inspection to see if the home has acceptable exposure to sunlight. Deal-breakers include trees and other buildings obscuring direct sunlight and roof angles that don’t have enough south-, east- and west-facing square footage.
The IRA’s Energy Efficient Home Improvement Credit offers a 30% tax credit on the cost of a solar installation through 2033. An average new installation costs $20,000, meaning homeowners would get $6,000 back. Tax credits are also available for homeowners who make energy-efficient home upgrades.
Without a home battery system, excess solar power would go to waste if not for programs like Xcel Energy’s Solar Rewards. Net metering allows unused power to be filtered back onto the grid, and the homeowner receives an energy credit for their contribution that is applied to the energy they use at night, or even in winter when little or no solar power is being generated. The grid effectively operates as a battery in this case.
Some homeowners don’t want to be reliant on the grid during times when their solar panels aren’t producing power. Prices have been falling for private battery systems that allow homeowners to store excess power on-site. An added IRA tax credit further reduces the cost.
Though not a component of the IRA, community solar programs exist for homeowners who cannot afford to install solar panels or don’t have the necessary roof exposure to sunlight. Even renters can subscribe to community solar programs, as the service does not require any physical changes to the property. Contact your electric utility for more information about community solar programs.