I.R.A. Tax Incentives for Solar Energy Projects represent an opportunity for solar structure fabricators in Mexico if understood correctly.

What is the Solar Investment Tax Incentive Credit?

The Inflation Reduction Act of 2022 introduced by the U.S. Government includes provisions to support domestic energy security and address climate change, with a specific focus on promoting renewable energy sources like solar energy. This legislation offers a significant financial incentive called the Solar Investment Tax Credit (ITC) for both commercial and residential solar energy projects.

The Solar Investment Tax Credit allows individuals and businesses to deduct 30% of the cost of installing a new solar energy system from their taxes, aiming to boost the adoption of cleaner energy solutions. Previously, the ITC had an expiration date that necessitated projects to be completed within a set timeframe, causing uncertainty for potential investors. However, the Inflation Reduction Act has now extended this 30% tax credit for at least ten years, marking a pivotal moment for solar energy investment in the U.S.

Besides the Base 30% ITC What are new adders under provision in I.R.A.

In addition to the base 30% tax credit, the Act introduces several more incentives:

- An extra 10% credit for using domestically produced steel, modules, and other products.

- Another 10% credit for projects situated in specific areas, including brownfields, low-income regions, or places with a history of heavy fossil fuel employment.

- An additional 20% credit for projects developed in low-income communities or that benefit low-income residents.

With these additional incentives, the total tax credit could approach nearly 50%.

What are the implications of using a Mexico based steel fabricator.

Under the previous provisions the only applicable is the domestically produced STEEL which means that it calls for steel raw materials from U.S. mills. A Mexican fabricator under NAFTA agreement if IMMEX certified has the ability to source such steel through a temporary import model, apply its labor and coatings and ship back into the United States and still apply because of U.S. steel usage in Solar Carport Structure Fabrication