INDIANAPOLIS – Part of the Inflation Reduction Act aims to expand use of wind and solar energy, and experts say you could see that happen in Indiana.
Businesses say a federal renewable energy tax credit has helped more Hoosiers make the switch to solar. And there’s a chance it could bring more homes and businesses on board.
“I’ve already had two calls today that people are literally calling in because of the bill being passed,” said Travis Summitt, a brand ambassador for Rectify Solar in Indianapolis, which primarily installs solar panels on homes.
Summitt said he believes raising that tax credit to 30% for installation costs, eight percentage points higher than the tax credit was supposed to be in 2023, will make an impact.
“What we typically find is that people as they’re looking towards the end of their tax year look to us and look to solar as an opportunity to capitalize on the federal tax credit, and that’s usually a big incentive to push people along,” Summitt said.
The tax credit applies to other renewable energy sources as well and will now be extended ten years. The legislation also creates other financial incentives to increase U.S. manufacturing of green energy equipment.
“Indiana – it’s been a great spot for renewable energy for well over a decade,” said Justin Johnson, COO of Arevon Energy, Inc., which is working to build solar plants in southern Indiana.
Those provisions could allow use of renewable energy to grow more quickly, Johnson added.
“I think that that’s one of the primary benefits of the incentives is you build it faster and more efficiently,” Johnson said. “Long supply chains make any type of construction project challenging.”
The legislation also changes the requirements for the $7,500 tax credit on electric vehicles.
John Graham, a professor with Indiana University’s O’Neill School of Public and Environmental Affairs who studies energy policy, said he believes the legislation will likely increase the use of green energy sources – but probably won’t lead to monumental changes.
“It will need to be accompanied by significant either regulations on industry or tax policy, like a carbon tax, or some type of economic incentive instrument in order to have a revolutionary impact,” Graham said.
Renewable energy has also been a focus in recent years at the Indiana Statehouse. A new law that went into effect earlier this year sets statewide standards for wind and solar energy.