Category: Residential Solar

Inflation Reduction Act and Solar Incentives

The Inflation Reduction Act (IRA) of 2022 (H.R. 5376) has been signed into law and there are changes to solar incentives.  The two big changes is the credit amount and the inclusion of battery storage.

Solar Tax Credit

The item that impacts residential or commercial solar incentives, otherwise know as Solar Tax Credit or Clean Energy Credit,  The previous program started at 30% credit and dropped each year.  Currently this plan would credit 26% of a solar system.

The change is that the credit goes back to 30% in 2022 and stays at that rate until 2032.  Yes more than 10 years you can apply for this 30% tax credit.  

The credit is applied to your federal tax filing for the year the system is installed and operational.  While planning keep in mind the time required for permitting, ordering, delivering, installing and operationalize your system may take longer than you might think.  The IRA will also create demand for solar systems increasing the time to credit.

Also keep in mind that the credit is for the purchase of a solar system, regardless is you finance, and does not cover solar systems that are leased.  Read more in my post

Solar Tax Credit Bonus

It is believed that you can increase your credit by 10%, 30% to 40%, by purchasing domestically produced hardware, 100% of steel and iron must be US manufactured in the United States.  Solar panels, inverters, and electrical gear – the goods must initially be 40% US manufactured, though this percentage will increase in the future.

Battery Storage Credit

The battery storage credit is now irregardless of being connected to a solar system.  You could just install a battery system.

A battery storage system is required on your solar system if you want to be completely off the grid.  It stores power during peak times and provided power during times when your solar system is not generating, nights and bad weather for example.   A battery system is not cheap and can be more than half of your total spend so including battery systems in the IRA is a significant benefit.  Read more about battery systems in the following post –


What Are You Looking For In A Residential Solar System?

Most people just think of lower electricity bills as the only benefit of installing a residential solar system. It certainly is a driving factor but it also enables other applications and benefits. I will cover what comes to my mind when I consider solar and would love to hear what other consider as well.

There are a few benefits that come to mind as I consider installing a residential solar systems. These benefits include:

  • Cheaper electricity
  • Emergency power backup
  • No cost charging of an electric vehicle
  • Green Energy
  • Tax credits

Cheaper Electricity

The price of electricity, compared to other countries, is not terribly high at this time but times are changing. The recent run up in crude oil prices and other commodities can and will impact electricity prices going forward.

The current administration is also pushing green energy and putting financial and regulatory pressure on electricity generate from non-green sources such as nuclear, gas and coal.

The cost of installing residential solar systems have come down as technology improves while electricity prices might be on the incline. I will cover the financial cost model and payback in coming posts.

Most power companies have a buy back program to pay you for electricity you don’t need and upload onto their grid. The probably don’t pay top dollar but it is better than nothing when you have more power than you can use.

Emergency Power Backup

It seems our national electrical grid is aging and subject to outages due to acks of God or terrorists. I lived in Florida during hurricane Wilma and we were without electricity for 12 days. Portable standby generators are noisy, fuel inefficient, and produce only a portion of the electricity you need each day. During the hurricane we had coffee, a fan and a refrigerator operating a few hours each day. We had cold showers in the dark and no air conditioning.

The cost to install and operate an emergency backup generator is not cheap. You can spend between 10,000 and 25,000 to install and 100’s in gas each year to operate. I am looking for a residential solar system solution that includes a battery system that would eliminate the need to install a emergency backup generator. A battery would also allow me to use my power during times when solar is not enough. I will factor this into my cost benefit analysis in a future post.

No Cost Charging Of An Electric Vehicle

I currently do not own an electric vehicle (EV) but for the first time I am beginning to consider it. The cost benefit analysis of going electric versus gas factors in the price of electricity from your power company. If I can generate my electricity at little cost it will make the benefit of an EV more compelling.

There are some reasonable tax credits if you buy the right EV and I would expect additional incentives from our current administration. I will have a future post on EV reviews and the current incentives.

Green Energy

I am not a fanatical green energy proponent but will gladly adopt green energy solutions if they make financial and operational sense.

Tax Credits

Like EV’s there are some federal and state incentives to going solar bringing your cost of installation down. I will go into more detail on these incentives in a future post.


So you can see there are many things you can factor in when considering a residential solar system. I believe it is good to know what you are considering as benefits, your requirements, before you start getting quotes. Solar system sales people are going push their solution and it might not provide you all the benefits today and in the future.

I would love to hear from you what your considerations are. Please post a comment.

Welcome to

Like many, I am considering adding a solar solution to my residential house and barn. I have been considering doing this for quite some time and I think is the time to take a long hard look at the cost and benefits and all the solutions available.

Please join me in my quest and I welcome comments and suggestions.