Aliya Bagewadi | 18 Aug 2022
Last week, we at Allume were at the edge of our seats as we watched the U.S. House of Representatives vote yes on the Inflation Reduction Act (IRA). Signed into law by President Biden, the IRA includes a historic $370B investment in climate solutions and environmental justice with the goal of reducing US carbon pollution by 40% in 2030.
Congressmen applaud after Speaker of the House Nancy Pelosi (D-CA) signed the Inflation Reduction Act during a bill enrolment ceremony after the House passed the legislation. The legislation provides the largest federal investment in to the climate in US history
How Allume Energy can help provide solar for LMI households and apartment renters
With our vision for a world in which everyone can access clean and affordable energy from the sun, we see a tremendous opportunity to extend the financial and environmental benefits of solar to more Americans than ever before.
It is important to note that, historically, federal tax incentives for residential solar largely benefited more affluent homeowners, furthering disparities in access to affordable solar for low to moderate income (LMI) households and apartment renters. With a population that is 43% LMI and apartment units in the hundreds of millions, access to affordable solar remains difficult, especially for communities that have been disproportionately burdened by climate change.
In fact, Allume created the SolShare to bridge the gap to accessible and affordable solar. The SolShare is our award-winning hardware solution that enables residents in apartments (better known in the industry as multifamily homes) to directly access and consume clean energy from rooftop solar panels. By dynamically distributing solar energy throughout a multifamily home, our technology helps lower energy bills for renters and landlords all while reducing a building’s reliance on fossil fuels. We call it our win-win-win.
The IRA will help make solar power more accessible
We are excited about the many ways in which the IRA can expand access to rooftop solar for LMIs and apartment renters. Here are parts of this landmark legislation that we see as game-changers for accessible solar:
1. Improvements to the Investment Tax Credit:
- The Investment Tax Credit (ITC) has been increased from 26% to 30%, and may now be transferred or sold to other taxpayers. Previously, a tax investor buying a credit was required to have an ownership interest in the facility receiving the credit. Now, these credits can be sold directly to anyone with tax liabilities. This means that non-profits with negligible tax profiles that install solar can on-sell the tax credits as a source of revenue
- The 30% applies to both business and residential projects, including projects installed in 2022, and will last until the end of 2032, creating long-term investment stability for the industry
- Batteries connected to solar power will also qualify for the ITC, even if they are not entirely charged by the solar
2. Additional Credits for Projects that Meet Key Criteria
- Along with the 30% ITC base, power producers can add on:
- 10% by using a certain percentage of US manufactured products
- 10% for facilities with retired coal infrastructure, or that had high employment levels by the coal, oil or natural gas industry
- 20% for solar projects in low-income communities
- Adding the 30% tax credit base, 10% for domestic production, 10% for catering to former fossil fuel communities, and 10% for selling solar to low income families – a tax credit could add up to whopping 60%
3. Rebates for Energy Saving Technologies
- The IRA provides $4.3 billion to State Energy Offices to establish rebates for a variety of home energy upgrades under the Home Owner Managing Energy Savings (HOMES) rebate program
- While subject to state implementation, rebates for multifamily apartments included $4,000 per dwelling unit and a maximum of $400,000 per multifamily building for retrofit projects that increase energy savings more than 35%
4. Grants and Financing for Energy Justice Initiatives
- $7 billion for renewable energy deployment – including rooftop and community solar – on low-income and disadvantaged communities. This will greatly help span the gap between high and low-income communities’ solar rollouts
- $8 billion for investments in reducing greenhouse gas emissions and promoting environmental justice, exclusively allocated to low-income and disadvantaged communities
If you are a renter, building owner, or solar installer, please get in touch. We look forward to seeing how the team at Allume Energy can help you make the most of rooftop solar for your apartments or multifamily homes.