With the Inflation Reduction Act expected to be passed and signed, investors could look to solar sector-related exchange traded funds to capitalize on the increased support for the clean energy industry.
“We’re sitting on the precipice of what could be the most impactful climate legislation of our lifetimes,” SunRun CEO Mary Powell told Yahoo Finance Live. “We’re really excited about it. We really see it as fundamentally accelerating this customer-led revolution to a much more sustainable, independent, resilient, and affordable energy system for Americans.”
The Inflation Reduction Act comes with about $370 billion in energy security and climate spending, including a 30% tax credit for installing residential solar panels that extends through December 31, 2034, and those who install solar battery systems could also qualify for a tax credit.
“Specifically, what this does is it just makes it even more affordable for those customers to go solar by delivering a proposition which can deliver even greater savings for them,” Powell added. “At the same time, the backdrop here also is we’re seeing energy inflation that is just really quite remarkable. We’re seeing utility rates rising all across the country. And so those things, too, are conspiring to really have this be such a monumental time in this space to help customers really move quickly to a cleaner, more cost-effective solution.”
The bill passed the Senate on Sunday in a 50-50 split down party lines with Vice President Kamala Harris making the tie-breaking vote. According to research provider Rhodium, the bill could help contribute a 31% to 44% reduction in 2005 level greenhouse gas emissions by 2030.
“With the passage of the Inflation Reduction Act in the Senate, solar and storage companies are one step closer to having the business certainty they need to make the long-term investments that decarbonize the electric grid and create millions of new career opportunities in cities and towns across the country,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said, according to PV Magazine.
“The solar industry has set a goal to account for 30% of all U.S. electricity generation by 2030, and this legislation will be a catalyst for reaching that target,” she added.
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