Homeowners Guide To The Inflation Reduction Act & Solar Panels
Despite being the nation's fifth-largest producer of marketed natural gas and the sixth-largest producer of crude oil, energy costs in Oklahoma continue to rise. While this is mainly due to increased natural gas prices, higher energy rates impact families across the state.
How much are the rate increases? Many of our fans on Facebook shared that their monthly energy bills From July - August of this year had nearly doubled.
You may have heard about the Inflation Reduction Act of 2022 and the historic amount of money invested in bringing down consumer energy costs, increasing energy security, and reducing emissions. Read on to learn how this bill will help Oklahoma homeowners and how to claim special tax credits for solar panels and home upgrades.
What's In The Inflation Reduction Act
It's easy to get overwhelmed reading the Inflation Reduction Act's changes, updates, and provisions. It's over 700 pages long! However, we've got you covered if you don't want to read the entire thing. Here's the gist:
The combined investments in the Budget Reconciliation bill would put the U.S. on a path to roughly 40% emissions reduction by 2030 and represents the single most significant climate investment in U.S. history by far.
Here are the five main ways it will help all Americans, including Oklahoma homeowners:
Lowers energy costs for Americans through policies that will lower prices at the pump and on electricity bills, help consumers afford technologies that will lower emissions and energy prices, and reduce costs.
Increases American energy security through policies to support energy reliability and cleaner production. This, coupled with historic investments in American clean energy manufacturing to lessen our reliance on China, will ensure that the transition to a clean economy creates millions of American manufacturing jobs and utilizes American-made clean technologies.
Invests in decarbonizing all sectors of the economy through targeted federal support of innovative climate solutions.
Focuses on investing in disadvantaged communities that are often left behind will share in the benefits of the transition to a clean economy.
Supports resilient rural communities by investing in farmers and forestland owners to be part of growing climate solutions and by ensuring rural communities adapt better to a rapidly changing climate.
Energy Savings & Tax Credits
Number one on the list above will have the most significant impact on homeowners because of the new funds available for green and energy-efficient home upgrades, including solar panels, appliances, air conditioners, and more. Here's a breakdown of the available energy-saving incentives and tax credits:
$9 billion for consumer home energy rebate programs, focused on low-income consumers, to electrify home appliances and for energy-efficient retrofits.
10 years of consumer tax credits to make homes energy efficient and run on clean energy, making heat pumps, rooftop solar, electric HVAC, and water heaters more affordable.
$4,000 consumer tax credit for lower/middle income individuals to buy used green vehicles, and up to $7,500 tax credit to purchase electric cars.
$1 billion grant program to make affordable housing more energy efficient.
Changes To Solar Tax Credit
Before the Inflation Reduction Act passed into law, the existing solar tax credit for Oklahoma homeowners was 26% and was set to end in 2023. The new law not only extended the tax credit but increased it! Here's what you need to know if you are thinking about switching to solar:
The solar tax credit has a new name - Renewable Clean Energy Tax Credit
Credit amount is now 30% through 2033
Commercial solar is also available for the 30% tax credit
After 2033, the tax credit amount will be lowered to 26%
A new tax credit will be available for stand-alone solar batteries and storage starting in 2023
There is also a provision in the bill that allows any homeowner who transitioned to solar in 2022 to get the new 30% tax credit rate automatically! This means Oklahoma homeowners who wet solar before August 2022 can get even more savings when they file their 2022 taxes.
There are additional tax credits for clean energy home upgrades such as heat pumps, water heaters, insulation, window and door upgrades, and credits for electric panel upgrades. Estimates show that homeowners can save $2,000 a year on these projects.
Get a breakdown of all available tax credits, incentives, and rebates for energy-efficient upgrades available to Oklahoma homeowners here.
How To Claim Solar Tax Credits & Rebates
Please remember that we are not tax professionals and do not give tax advice. This information is only a general outline of what steps/forms to use. Please consult a tax consultant before filing.
Claiming the solar tax credit is easier than you may think! You will need to fill out a specific form and list system costs and other fees like installation, permitting, etc. Get instructions and a copy of the form in our free online guide for homeowners.
Interested In Learning More About Oklahoma Solar Options?
Whether you are looking to save money on your electric bill or want to reduce your carbon footprint, our team of solar experts can help! We've guided Oklahoma City homeowners to energy savings for almost a decade with the best solar energy systems available. We also offer free home inspections and solar quotes to help you understand if switching is right for you. Ready to get started? Give us a call at (405) 310-8081, or schedule a meeting with us online!