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Solar Industry to See Historic Investment from Inflation Reduction Act

August 04, 2022

Dale A. Burket | Amanda Wilson

The Inflation Reduction Act of 2022, which Senate Democrats intend to move through their chamber using a budget reconciliation process allowing it to pass with 50 votes (plus Vice President Harris breaking a tie) before it moves to a vote in the House of Representatives, represents the single largest energy and climate investment by the U.S. government in the nation’s history. Given the Act’s objectives, which include lowering consumers’ energy costs, increasing the country’s energy independence, and decarbonizing the U.S. economy, clean and renewable energy businesses are poised for extraordinary growth.

The solar industry in particular – manufacturers, investors, workers, and suppliers – will benefit from billions of dollars in tax credits, funding for research, loans, grants, and other incentives provided in the Act, as discussed below.

Tax Credits

A key element of the 725-page Act is its extension of the production tax credit (PTC) and the investment tax credit (ITC) for solar (and other eligible) products. Notably, the Act extends the ITC for 10 years at 30 percent of the cost of installed solar equipment. The percentage decreases to 26 percent in 2033 and 22 percent in 2034.

Under the Act, the 30 percent credit applies to energy storage that is co-located or that is standalone.

Solar projects that begin construction prior to 2025 will be eligible to choose the PTC instead of the ITC. The Act also expands the ITC to solar facilities located in low-income or Native American communities. And, under the Act, the PTC and ITC retain the 10 percent bonus for domestic content – “adders,” in fact, may increase the credit in some instances to 50 percent.

In addition, the Act provides for an “advanced manufacturing production credit” intended to promote the domestic production of solar cells and modules and their components, with tax credits available for the production of cells, photovoltaic wafers, solar grade polysilicon, polymeric backsheets, solar modules, and more.

Significantly, a "direct pay" provision in the Act would permit developers to receive the tax credit as a refund, rather than as a credit for tax due – especially important where they owe no tax or owe tax in an amount less than the amount of the credit.

Residential Benefits

The Act extends for a decade the tax credits available to consumers for rooftop solar panels (as well as for other home energy products, such as electric heating, ventilation and air conditioning systems; heat pumps; and water heaters).

Defense Production Act

In early June, President Biden announced his intention to use the Defense Production Act (DPA) to increase domestic production of solar photovoltaic modules and module components. The Act builds on that announcement, appropriating $500 million for the DPA.


The Act also provides for, among other things, the sale of renewable energy tax credits; new funding to enable the U.S. Department of Energy to increase its financing of renewable energy projects; and “domestic manufacturing conversion grants” for the domestic production of efficient hybrid, plug-in electric hybrid, plug-in electric drive, and hydrogen fuel cell electric vehicles.

If the Act indeed becomes law, the U.S. solar industry will have the financial resources to be able to compete with the Chinese solar industry and, in fact, to end its dominance. Domestic production, and the U.S. market for solar panels and companion products, will soar. The Act’s goal of reducing greenhouse gas emissions by approximately 40 percent by 2030 may very well be in reach.

This article is informational only. You should consult an attorney before acting or failing to act. The law may change rapidly and no warranty is given. LOWNDES DISCLAIMS ALL IMPLIED WARRANTIES AND WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ALL ARTICLES ARE PROVIDED AS IS AND WITH ALL FAULTS. Consult a Lowndes attorney if you wish to establish an attorney/client relationship.

Dale Burket’s diverse real estate practice encompasses real estate transactions, development and finance, commercial leasing, solar and other renewable energy and environmental law.

Board Certified in Real Estate Law by The Florida Bar since 1992, Dale brings more than 40 years of legal experience and a particular expertise in managing large, multi-site, multi-state real estate acquisitions, sales and sale-leaseback projects. Currently he devotes a substantial portion of his practice to complex projects involving the management of real estate, tax, environmental and land use issues.

Dale has represented real estate investment trusts (REITs) in connection with mergers, securitizations, purchase of income-producing properties, and sales of properties by taxable REIT subsidiaries. He also co-chairs the firm’s Renewable Energy Group and has advised owners, lessees and developers regarding utility-scale solar farms.

Over his career, Dale has negotiated and closed several thousand sale-leaseback transactions for restaurant REITS and partnerships, including portfolio acquisitions and sales with many of the top 100 national restaurant chains, as well as 1031 tax-deferred exchanges of restaurants in sales to private investors. He also has extensive experience representing business clients in the negotiation and closing of complex senior debt facility financings and large real estate transactions, and he is particularly adept at the project management requirements of such transactions.

With an emphasis on client service, Dale has played a leading role in the firm’s expanded commitment to partnering with clients on alternative and special fee arrangements that share risk and promote efficiency and collaboration. He has also been a long-time advocate for incorporating “green” and sustainable initiatives into his clients’ projects, to both preserve the environment and to curb costs. He has written about sustainability issues in the commercial context, including “green” commercial leases, existing building retrofits, renewable energy sources, water conservation and Central Florida’s growing public transportation infrastructure.

A lifelong musician, Dale’s love for music combined with his college training as a music teacher have led to more than 15 years of volunteer involvement with the Florida Young Artists Orchestra (now a part of Central Florida Community Arts), serving as both a board member and three-term president. He also serves as a board member of the Winter Park Chamber Music Academy and is a Conductor for the Maitland Symphony Orchestra, a unique Central Florida community orchestra.


A member of the firm’s tax practice, Amanda Wilson concentrates on federal tax planning and structuring. She represents clients in a wide variety of complex federal tax matters with a particular emphasis on pass-through entities such as partnerships, S corporations and real estate investment trusts.

Specifically, Amanda focuses on advising clients on the formation, operation, acquisition and restructuring of such pass-through entities. In addition, she regularly advises clients on the structuring and operation of private equity funds, real estate funds and timber funds. Amanda is the author of the Bloomberg Tax Management Portfolio 718-3rd Edition, Partnerships- Disposition of Partnership Interests or Partnership Business; Partnership Termination.

Amanda regularly works in structuring deals to benefit from tax advantaged structures, including like-kind exchanges, new market tax credits, low income housing tax credits, qualified opportunity zones, and investment tax credits available for solar and other renewable energy. Amanda also has extensive experience in corporate planning and international tax matters, as well as federal tax controversy. Her practice before the Internal Revenue Service (IRS) includes providing advice on audits and appeals, drafting protests and ruling requests, and negotiating settlements.

Prior to joining the firm, Amanda worked for Sutherland Asbill & Brennan LLP (now Eversheds Sutherland), an Am Law 100 firm in the Atlanta office, where she was part of Sutherland’s Tax Practice Group. Amanda has also served as an adjunct professor at Emory University School of Law where she taught Partnership Taxation.

Amanda regularly contributes to the firm’s Taxing Times blog and is a regular panelist on tax webinars hosted by Strafford Publications.

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