Green Energy Archives

Demystifying the Inflation Reduction Act: Part 3 — Tax Implications for Businesses and Corporations

By Office Staff|2025-07-10T10:36:45-07:00September 16, 2022|Categories: Legislation, Tax Credits|Tags: Business Energy Tax Credits, Corporate Minimum Tax, Green Energy, Inflation Reduction Act|0 Comments

The Inflation Reduction Act of 2022 (IRA ’22) is generally considered to be ‘Build Back Better Light’ (note: we briefly covered the President’s ‘Build Back Better’ proposal in 2021 Year-End Tax-planning Tips for Business Owners here on the SWC blog.). Many of its provisions are clearly intended to offset the costs of transitioning to green energy for consumers, as explained in Part 1 and Part 2 of this four-part series.

However, the IRA ’22 also contains several provisions that apply specifically to businesses and corporations — some of which provide similar incentives for adopting green energy alternatives and others which clearly target businesses and corporations to increase tax revenue — presumably to help cover the cost of this Act.

In this, Part 3 of our series, we get down to business as we highlight what business owners and corporate leaders need to know about the IRA ’22.

Green Energy Tax Incentives: Extended and Revised

Many of the energy credits available to businesses before the enactment of the Inflation Reduction Act of 2022 have been extended and revised by the Act. Below are highlights of some of the changes made to existing business energy credits and incentives:

Revises the Internal Revenue Code (IRC) §179D Energy Efficient Commercial Buildings deduction as follows:
- The deduction is increased for taxpayers who meet specified prevailing wage and apprenticeship requirements (see below) and decreased for taxpayers who do not. (For additional information on prevailing wages, visit the U.S. Department of Labor’s prevailing wages webpage.)
- Allows additional increases for achieving specified energy savings targets.
- Replaces the lifetime cap on the deduction with a three-year cap.
- Updates the efficiency standards that must be met.
- Allows tax-exempt entities, including governmental agencies, to allocate the deduction to the designer of the building or the qualified retrofit plan.
Modifies the Renewable Electricity Production Credit in the following ways: Continue reading… Continue reading… Continue reading…

Demystifying the Inflation Reduction Act: Part 2 — Energy Efficiency Credits and Rebates for Residents and Owners of Residential Property

By Office Staff|2025-07-10T10:37:09-07:00September 9, 2022|Categories: Legislation, Tax Credits|Tags: Green Energy, HOMES Retrofit Rebates, Inflation Reduction Act, Residential Clean Energy Credit|0 Comments

The Inflation Reduction Act of 2022 (IRA ’22) has garnered a great deal of press, along with even more confusion and concern. Its provisions cover everything from offsetting the costs of the transition to green energy to helping consumers keep pace with the rising costs of health insurance and prescription medications.

To help you make sense of this massive piece of legislation, we are breaking it all down in this four-part series — “Demystifying the Inflation Reduction Act.”

Last week, we posted Part 1 of this series to explain the Clean Vehicle Credit — a tax credit intended to help offset the cost of certain new and used electric vehicles and electric hybrids.

Here, in Part 2 of this series, we stay with the theme of green energy by examining tax incentives and rebates intended to help residents and owners of residential property make their homes more energy efficient.
In Part 3, we shift our attention to provisions in the Act that apply to businesses.
And we wrap the series in Part 4 by covering a hodgepodge of other provisions, including tax incentives to help make healthcare more affordable and increased funding for the IRS.

The Residential Clean Energy Credit

In the Inflation Reduction Act of 2022, the Residential Energy Efficient Property Credit under Internal Revenue Code §25D (often referred to as the Solar Energy Credit) is renamed the “Residential Clean Energy Credit” and is extended to property placed in service prior to January 1, 2035.

Prior to passage of the Inflation Reduction Act, homeowners were entitled to a non-refundable tax credit for the use of solar electric panels, solar hot water heaters, fuel cells, small wind energy systems, geothermal heat pumps, and biomass fuel units they had installed for their homes.

That credit was in the process of being gradually reduced and then eliminated by the end of 2023. The Inflation Reduction Act retroactively returns the credit to 30 percent for the years 2022 through 2032 when it begins to phase out again and end after 2034. Those who qualify for the credit in 2022 receive a 30 percent credit rather than the expected 26 percent.

Electrifying: The Act’s battery storage technology is also added to the list of qualified expenditures eligible for the renamed credit and is applicable to expenditures made after December 31, 2022.

The Energy Efficient Home Improvement Credit

The Energy Efficient Home Improvement Credit essentially renames and modifies the Internal Revenue Code’s §25C Nonbusiness Energy Credit and extends it to apply to purchases of qualified property placed in service prior to January 1, 2033.

Notable changes introduced by the Energy Efficient Home Improvement Credit include the following and apply to property placed in service after December 31, 2022 and through December 31, 2032: Continue reading… Continue reading… Continue reading…