Inflation Reduction Act – an Update for Solar and Energy Storage in California

As you may well be aware, the Inflation Reduction Act recently passed through Congress and was signed into law by the President. There are many exciting updates within this legislation that support renewable energy projects, including updated and improved incentive programs and grants. As your energy solutions partner, CalCom Energy is committed to keeping you up to date on the latest developments and impacts this legislation will have on your current and future projects. The next stage of the new law will involve the detailed rulemaking process, wherein the specific parameters of the legislation’s rulings will be laid out. Until then… Here is what we know now!

  • The federal Investment Tax Credit (ITC) is going back up to 30% for solar projects less than 1 MWac, and that 30% will extend for the next 10 years – up until 2033.
    • 30% will be retroactive for most solar projects that achieve Permission to Operate (PTO) in 2022.
    • For solar projects larger than 1MWac that begin construction 60 days after guidance is initiated, the ITC will be 6% with adjustment up to 30% if labor requirements are met and an adder of an additional 10% if a domestic components minimum is met
    • Energy storage projects become eligible for ITC beginning in 2023.
    • There are additional potential credit adders for locations in “energy communities”, low-income communities and other qualifiers. Combined, these adders have the potential to increase the ITC to 50% of eligible costs.
    • There will be ways for non-profit and non-tax-paying entities to receive ITC-equivalent benefits.
    • There will be ways for tax credits to be transferred and for tax credits not used in the first year to carry forward to future years.
  • Production Tax Credit (PTC) becoming available for solar
    • PTC is now available for solar as an alternative to the ITC at a rate of 2.5 cents/kWh if workforce requirements are met and 0.5 cents/kWh if they are not.
    • Credit adders are also applicable to PTC and have the potential to increase the PTC rate by 20%

Right now, we are looking at an estimated 60-90 days until rulemaking is complete. As your energy solutions partner, CalCom Energy pledges to keep you up to date on the latest developments and how this new legislation will impact you, your operations, and your future energy projects. Please do not hesitate to reach out with any questions. We have staff available to guide you through this process! Email:

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