Summary of the New Residential Clean Energy Credit Signed Into Law on August 16, 2022

The Inflation Reduction Act was signed into law on August 16, 2022. Among other things, One of the things it changed was the Residential Energy Efficient Property tax credit, which is now called the Residential Clean Energy Credit.

Under the old law, the solar energy credit, which was previously dropped from 30% prior to 2020 to 26% in 2020-2022 and 22% in 2023, was set to expire in 2024.

Under the new law, the credit is retroactively increased back to 30% for residential solar systems installed in 2022 through 2032. Then it will drop to 26% in 2033 and 22% in 2034.

Additionally, starting in 2023, the tax credit covers battery storage technology with a capacity of three kilowatt hours.

The tax credit is a non-refundable credit, but can be carried forward to future tax years.