The fact that the Inflation Reduction Act (IRA) provides clean energy benefits might be surprising to some people, or perhaps confusing because of the act’s name, which is unrelated to energy. The recent peak inflation period doesn’t, on the surface, have much to do with solar power and energy storage, and yet homeowners who have solar power systems that were installed and reached their payback period were granted a financial break because they were able to partially or completely avoid paying extra for electricity. They were able to avoid the extra cost from inflation by generating some or all their own electricity. This ability is just one of the benefits of installing a home solar power system.
If you were paying attention to the IRA’s details, you became aware that the act does in fact pertain to both home energy and clean vehicles, among other considerations.
Shawn Fitzgerald, Vice President of Corporate Development and Product Strategy at SunPower, answered some IRA-related energy questions for CleanTechnica.
How are nearly 250 million Americans missing out on IRA benefits?
The reason that Americans have yet to take advantage of the IRA benefits is because many people still don’t know about it. SunPower’s Energy Switch Index report, estimates that nearly 250 million people have either never heard of the IRA, or don’t realize solar tax credits are part of the $369 billion package. The groups that stand to benefit the most from this knowledge are often the least informed. Our report found that more than a quarter of low to middle income Americans (those who earn less than $50,000 a year) are less likely to be familiar with the IRA. And, despite being the most climate-conscious group, a quarter of Millennials and a third of Gen Z believe they’re ineligible for IRA benefits. All clean energy leaders across industry, policy and nonprofits must take collective action to educate consumers on the benefits they now have access to.
What are some of the key benefits they are missing out on?
The IRA includes a solar Investment Tax Credit (ITC) that enables qualified American taxpayers who purchase solar to receive an income tax credit worth 30% of the cost of their solar system until 2032, making the cost of solar energy more affordable over the next nine years. It also includes another tax credit worth 30% of the cost of a battery storage system, making solar-powered battery storage more affordable too. Finally, it is also available to both single family and multifamily homes making the benefits accessible to both homeowners and renters.
Why do so many Americans still mistakenly believe home solar power is not affordable?
What people may not know is that 90% of homeowners who installed solar in 2022 financed their system with a loan or a lease, according to a recent residential solar finance report. Many customers who finance their system start seeing savings as soon as their system is activated. It’s helpful to think about solar in terms of a monthly payment, like an electricity bill. Solar can also be thought of as an investment that decreases your electricity bill. SunPower offers qualified customers a $0 down loan and competitive lease options. The average payback period for a home solar system is about nine years, which is less than the average warranty period of 25 years. Home solar can also increase the resale value of your home.
How does the IRA support homeowners to get their own home solar power?
Through the IRA, qualified American taxpayers who purchase solar can receive an income tax credit worth 30% of the cost of their solar and/or storage systems.
Does it provide incentives for getting home energy storage as well?
Yes. The IRA’s solar Investment Tax Credit (ITC) applies to both solar panels and solar storage. The 30% federal tax credit for battery storage is available for solar battery systems which are installed between 2023 and 2032. At the end of 2032, the solar tax credit will be reduced annually and eventually phased out. Solar batteries can be added to existing solar systems or installed at the same time.
Does SunPower offer home solar and energy storage solutions combined? If so, what are they?
SunPower offers complete solar energy and storage systems that include solar panels, battery storage, and EV charging. The mySunPower® app allows SunVault customers the ability to choose how they use their stored energy, and also allows homeowners with SunPower® solar and/or SunVault to monitor the daily production of their system.
Did the IRA influence the way you interact with prospective customers when they make inquiries about home solar and or storage?
The IRA has made solar and energy storage more affordable and more accessible than ever before. Powered by the new legislation in the IRA, we are emphasizing programs that drive adoption, and expanding efforts in areas that are transitioning to clean energy from fossil fuels. The IRA provides a higher tax credit value, called a bonus credit, for certain projects sold via a lease to a customer. One of these is the energy communities bonus credit. which applies to leased projects located in communities across the US where the local economy has been primarily driven by fossil fuels. The bonus credit helps accelerate access to solar even faster. In turn, we have expanded availability of our products and services in these communities.
SunPower has set a goal to increase solar access in historically disadvantaged communities by 25% by 2025. What is SunPower doing to help increase solar power access?
Residential solar is more affordable than it’s ever been, and widespread adoption of renewable energy at the individual level is critical. Our “25X25” diversity, equity and inclusion commitments are designed to ensure the benefits of solar serve American families, jobseekers and businesses that have been historically marginalized. To promote equity in solar, we are targeting 25% growth in dealers and subcontractors by certified minority- and women-owned businesses by 2025. To meet this goal, we host regional job fairs and solar workforce training programs with like-minded organizations – providing diverse-owned companies better opportunities to do business with SunPower as dealers, suppliers, and contractors. SunPower is also working with Black Owners of Solar Services (BOSS) to co-develop a mentoring and sponsorship program to connect Black-owned solar businesses to opportunities within SunPower’s dealer program. This year we also partnered with Habitat for Humanity of Greater Sacramento to supply their affordable housing community, Cornerstone, with solar energy. With a donation of high-quality panels and a supporting grant, SunPower is empowering Habitat for Humanity to create the first-of-its-kind, all-electric, solar-powered affordable housing community serving low income families in partnership with Mutual Housing of CA.
Why is energy equity important to SunPower?
At SunPower we are increasing consumer awareness and easing barriers to access to help create a cleaner and more sustainable home life for all Americans. We believe that everyone deserves access to affordable, clean energy. We’re proud to be able to make a meaningful impact on communities across the United States, while supporting our planet for a more sustainable future.
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