Solar and the Inflation Reduction Act: A Mid-Year Progress Report

Introduction

Nearly two years after its passage, the Inflation Reduction Act (IRA) is transforming the U.S. solar industry. In 2025, the ripple effects are visible across supply chains, project pipelines, and workforce development. Billions of dollars in clean energy incentives are flowing into commercial rooftops, rural farms, municipal buildings, and community solar projects. This mid-year check-in highlights what’s working, what’s still unfolding, and how Surge is helping clients benefit from the IRA.

Key Wins from the IRA So Far

The IRA’s clean energy provisions have reshaped the economics of solar:

• The 30% Investment Tax Credit (ITC) is locked in through 2032, creating long-term stability

• Standalone storage now qualifies for the full ITC—no solar pairing required

• Additional “adder” credits (up to 70% total) are available for projects that meet certain criteria

• Direct Pay enables tax-exempt entities—like schools and nonprofits—to receive full-value payments instead of tax credits

• Manufacturing tax credits are bringing solar panel, inverter, and battery factories back to U.S. soil

Together, these provisions have supercharged development and created new funding pathways for traditionally excluded sectors.

Adders Making the Biggest Impact

Many Surge clients are benefiting from IRA adders, including:

• Low-Income Communities Bonus Credit (up to 20% extra)

• Domestic Content Bonus Credit (10% extra)

• Energy Community Bonus Credit (10% extra for fossil fuel transition zones)

• Prevailing Wage & Apprenticeship Bonus (required for full 30% ITC on larger projects)

Stacking these incentives often results in 40%–50% tax credit coverage—or more.

Challenges and Delays in Implementation

Despite its promise, the IRA rollout has faced growing pains:

• Guidance for some adders (like domestic content) has evolved slowly

• Interconnection bottlenecks are delaying project deployment

• Tax credit transfer markets are still maturing, limiting liquidity for some developers

• Not all states or utilities have aligned their programs with federal guidance

Surge navigates this uncertainty by tracking policy updates daily and structuring deals to remain flexible.

IRA and the Shift Toward Equitable Solar

One of the IRA’s biggest goals is equitable access. As of mid-2025:

• Funding for projects in low-income and tribal communities has expanded

• Community solar is receiving priority in many DOE and state-level grants

• Workforce training programs are investing in veterans, formerly incarcerated workers, and women

• Public school districts and municipalities are securing Direct Pay grants for solar + storage

Surge supports inclusive project development by building relationships with local stakeholders and ensuring every project maximizes its social impact.

What This Means for Commercial Property Owners

If you own or manage a commercial building, the IRA offers:

• More ways to finance projects with little or no upfront cost

• Higher tax credits, even in less-than-ideal locations

• New access to battery storage, EV charging, and electrification incentives

• Opportunities to participate in grid services and virtual power plants

And it’s not just federal: many states have launched complementary programs that Surge can help you layer in.

How Surge Helps Clients Capitalize on IRA Incentives

Surge makes the IRA actionable. We:

• Analyze your site to determine IRA eligibility and adder potential

• Structure projects to meet wage and domestic content standards

• Partner with tax equity buyers if you don’t have appetite for the full credit

• Apply for Direct Pay on your behalf (if applicable)

• Track timelines for IRS and DOE funding windows

Our job is to simplify complexity—and turn federal policy into practical solar solutions.

TL;DR Summary

• The Inflation Reduction Act has made commercial solar more accessible, more affordable, and more equitable

• New tax credit adders, Direct Pay, and manufacturing incentives are reshaping the market

• While rollout challenges remain, Surge helps clients cut through the noise and unlock maximum value