IRA updates for residential installers

During our takeover of the Suncast PowerUp Live lounge at RE+, we seized the opportunity to ask our audience of solar installers:

• How many of you received IRA money outside of the standard 30% tax credit?  
• How many of you have a plan for accessing the billions of dollars available through Solar for All and REAP grants?  

Not a single person raised their hands.

We weren’t entirely surprised.  Two years after the passing of the Inflation Reduction Act, money from Solar for All and REAP grants is only just beginning to flow out to residential solar installers.  But now that it’s flowing, we want to make sure solar leaders know how to take advantage of it.  After all, with $7B allocated for the Solar for All program and $2B set aside for REAP grants, there’s enough money to keep your funnel full — if your sales team knows how to build a strategy around these incentives.

That’s why we hosted a special panel at RE+ in Anaheim, moderated by Scott Nguyen, CEO of Bodhi, and with special expert guests to guide installers on how to take advantage of these programs.  Our panelists were:

• Sean Garren, Chief Programs Director of Vote Solar
• Corey Ramsden, VP, Go Solar Programs at Solar United Neighbors 

Below, you’ll find answers to some of the most common questions around the Solar for All and REAP programs, as well as a full recording of the event:

What is the REAP program for solar?

REAP stands for the Rural Energy for America Program and aims to get dollars into rural communities — that’s farms and small businesses in rural areas.  The Inflation Reduction Act added $2B to that program and increased the award amount from 25% to 50% of the cost of a system.

For example, Solar for All shared a story of a family in Virginia who owns a vineyard and used REAP grants along with the ITC and accelerated deprecation to fund their solar project, lowering their electricity bill from $5-7K a year to just $1K.  

What’s the biggest hurdle for REAP grants?

Unfortunately, it’s the application process itself.  It is a government grant which means installers do need to understand the process if they want to make this a part of their business model.

The good news is that there are Technical Assistance guides that can help you with the application process.

What is Solar for All?

Solar for All is an IRA program designed to expand solar access to lower income and disadvantaged communities.  $7B was recently awarded to states and non-profits to run Solar for All programs.  However, the money is not quite flowing yet.

Each awardee is currently working out the details of their programs.  Vote Solar expects that starting spring 2025 we’ll start to see the money get fully unlocked.  Most likely, the programs will be run through RFPs.  What that means is that right now is the opportunity to engage the awardees to influence the design of the programs. 

Which markets will see the impact of Solar for All first?

Vote Solar expects that states that already have pretty substantial rooftop or community solar programs will be the first movers — and states that already have low-income programming will have an even faster roll-out.  

This means that states like Massachusetts, New York, Illinois, Texas, and California are going to be leading the way on this, with a ton of market expansion, cheaper financing, and more and larger incentives for low-income communities.  While the LMI community may have seen like a niche market before, the scale of money involved gives this the opportunity to turn this into a much more substantial market.  

What are the challenges for Solar for All?

There’s still work to be done around more seamless income verification for customers wanting to leverage Solar for All incentives.  The hope is that organizations like Vote Solar and the administrators of the funding take on these challenges, so that installers don’t have to ask customers to run credit checks or verify their income through you.

What is direct or elected pay in the Inflation Reduction Act?

Elected pay is really the means within the IRA to allow non-profits, municipalities, and tribal organizations to claim the tax credit through a filing process with the IRS.  Within this process they are declaring they are going to build the project, then proving they have finished that project, and then filing on their taxes with that registration so they can get the 30% money back.  

What are the big challenges with direct or elected pay? 

Non-profits do not receive the tax credit back until after the install is complete, and they’ve completed their filing.  This means that the installer needs to somehow help bridge that 30% payback at the outset to fund the full cost of the install at the start of the project.  Vote Solar expects that the green banking opportunities that are cropping up after the Greenhouse Gas Reduction fund money will help provide some of this bridge financing.  

For more details around specific markets (Illinois, Georgia, and more!), as some of the learnings from past Solar for All work (how to manage cash flow!), make sure to watch the full event below: