UPDATE AUGUST 16, 2022 7:00 PM EDT: President Joe Biden signed the inflation Reduction Act into law with support from Senate Majority Chuck Schumer, D-N.Y., and Senator Joe Manchin, D-W VA. The Inflation Reduction Act is the largest climate investment in US history. $369 billion is devoted to investing in domestic energy production and manufacturing and reducing carbon emissions by approximately 40% by 2030. The bill will undoubtedly spur the growth of the solar industry.

The reconciliation deal between Senators Joe Manchin and Chuck Schumer is meant to incentivize renewable energy like wind and solar. According to CNN, $60 billion will be utilized for domestic clean energy manufacturing and $30 billion for a production tax credit for wind, solar, and battery storage.

The Inflation Reduction Act includes a 10-year extension of the solar investment tax credit (ITC) at 30% and introduces a 30% ITC for standalone battery storage. According to the Solar Energy Industries Association (SEIA), the ITC has been one of the most important US federal policy mechanisms to incentivize solar projects. The ITC was initially enacted in 2006 at 26%. Since 2006, the solar industry has grown 10,000%. The SEIA also explained that the ITC is a dollar-for-dollar reduction in the taxes residential or commercial property owners pay to the government based on the amount of investment in a solar project. The increase in the ITC means that property owners will save more money in taxes by implementing solar. The US Energy Information Administration found that extending the investment and production tax credits through 2050 for renewable energy generation will increase annual US solar generation by 10%.

Abigail Ross Hopper, the president and CEO of Solar Energy Industries Association (SEIA) released a statement following the Senate passing the legislation:

œToday is a monumental day for Americas clean energy progress and global climate leadership. With the passage of the Inflation Reduction Act in the Senate, solar and storage companies are one step closer to having the business certainty they need to make the long-term investments that decarbonize the electric grid and create millions of new career opportunities in cities and towns across the country.

œThis legislation is the most transformational investment America has ever made in our climate future, and we are thankful to our members, the clean energy community and every one of our solar champions in Congress for their work to get us to this historic moment. The solar industry has set a goal to account for 30% of all U.S. electricity generation by 2030, and this legislation will be a catalyst for reaching that target. Now the work can begin to build out Americas clean energy economy with historic deployment, domestic manufacturing, investments in low-income communities, energy storage, smoother interconnection, and so much more.

The Inflation Reduction Act will increase businesses investment in wind and solar power with low carbon emissions. As investment in renewable energy industries rises, we will get closer to meeting sustainability and climate change goals.