On November 15, 2021 President Joe Biden signed into effect a new $1.2 trillion bipartisan infrastructure bill into law. A big part of the bipartisan bill revolves around a shift in America’s views related to the expansion of renewable energy sources such as wind, geothermal, hydroelectric, and solar energy. Below are a few key reasons we believe that this bill will help make 2022 the best year yet for going solar.
A significant investment in large-scale infrastructure
President Biden’s $1.2 trillion bipartisan infrastructure bill carves out $25 billion for renewable energy R&D and large-scale energy projects, split between solar, wind, water, and geothermal projects. The addition of these funds will push the Department of Energy’s 2022 budget to $5 billion, not counting any additional funds that may be provided through ordinary appropriations. Although the Department of Energy has advocated for large-scale projects in the past, the new infrastructure bill makes these projects a higher priority. The bill also aligns with Congress’s vision set out a year ago in the Energy Act of 2020. An underlying theme of both the infrastructure bill and the energy act is on U.S. job creation, which will help drive domestic manufacturing and likely increase panel supply.
An increase in electricity prices
Electricity prices have recently increased to the highest levels in decades. And specifically, natural gas prices are currently the highest they’ve been since 2014 and projected to continue to rise in the future. If you go solar in 2022, you can combat the ever-increasing cost of electricity and install a system that meets 100% of your electricity needs. Helping you save money both in the short and long term.
Solar tax credit phase down
In 2020 Congress passed an extension of the solar tax credit, also known as the solar investment tax credit (ITC), which provides a 26 percent tax credit for systems installed in 2022. However, that number falls to 22 percent in 2023 and goes away in 2024 for residential projects, while commercial projects will be reduced to 10 percent ongoing. This phase-down means many homeowners will be looking to install their solar panels while the best tax credit rates are in effect.
When all these factors are considered together, 2022 looks like it could be another breakthrough year for clean, renewable solar energy.