The Inflation Reduction Act (IRA) provides amazing tax incentives for solar energy projects, including a 30% Investment Tax Credit (ITC) for solar installations. But here’s the exciting part – by making sure your solar system components include at least 40% made-in-the-U.S. content, you can unlock an additional 10% bonus tax credit. This bonus adder is offered to encourage solar system owners to use American-made products, which is a win-win for U.S. manufacturing and your wallet.
In this blog, we’ll explain what domestic content means, how to meet the federal requirements for the tax credit and how to source American-made engineered solutions for attaching solar to your metal roof.
What Is the Inflation Reduction Act?
The IRA focuses on renewable energy projects and has been a huge win for those interested in making the switch to cleaner energy. It originated to help fight inflation, create clean energy jobs and promote energy independence in America. The IRA gives tax credits to people and businesses using green energy, like solar panels, on their projects and buildings. Plus, there’s the Domestic Content Bonus Credit, which provides even bigger tax discounts if American-made parts are used. Let’s break down the specifics of domestic content and what’s required to get the bonus adder.
Solar installations can qualify for significant tax savings
What Is Domestic Content?
Within the IRA, there’s the Domestic Content Bonus Credit, which promotes the use of American-made products in renewable energy projects. If a solar roof system uses at least 40% made-in-America components, the project qualifies for this extra tax credit. This bonus adder helps lower the net cost of renewable energy systems in America, which has a positive effect on the country’s labor force and supply chain capabilities.
You can think of the ITC like this:
- 30% ITC for solar installations
- 10% bonus credit for systems that use at least 40% domestic content
New Elective Safe Harbor
Introduced in May 2024, the New Elective Safe Harbor provision within the ITC established a classification of system products and components to simplify their cost savings. Within the solar project categorization form, the New Elective Safe Harbor updated the classification to specifically call out ground-mount and rooftop photovoltaic systems, making it clearer which types of solar projects are eligible for the credit.
Prior to the existence of the New Elective Safe Harbor, installers, business owners and homeowners were burdened with tracking individual components to determine their eligibility for domestic content tax credits. Now, it’s clear which products can contribute to significant savings. This comes in the form of a simplified method for calculating the percentage of domestic content on a project.
Simplified table for calculating domestic content eligibility
Solar installation projects on metal roofs can take full advantage of the IRA’s tax incentives, specifically the Domestic Content Bonus Credit, by utilizing brackets, clamps and rail-less solutions made in America.
You can use non-penetrating standing seam roof clamps on metal roofs to securely attach solar panels without causing damage to the roof. These clamps will dimple the roof seam without penetrating it, ultimately preserving the integrity of the roof and leaving the manufacturer’s warranty intact. Engineered brackets, designed to attach to exposed-fastened roofs, ensure a strong, secure solar installation.
PVKIT® direct-attach™ rail-less solar mount
Choosing the right brackets, clamps and direct-attach rail-less solutions can significantly improve the performance of your solar PV system, while also unlocking substantial tax savings through the IRA’s Domestic Content Bonus Credit.
Why Choose Made-in-the-USA Products?
As the U.S. continues its transition to sustainable, clean energy, the IRA and Domestic Content Bonus Credit play key roles in encouraging the use of American-made products in the renewable energy sector. By choosing made-in-America products and product components, you’ll:
- Increase tax savings
- Reduce shipping fees and import taxes
- Boost U.S. manufacturing
The S-5! Manufacturing Plant in Iowa Park, Texas, produces made-in-the-USA metal roof attachments which are warranted* for the life of the solar—and the roof
How To Claim Your Tax Credit
This all sounds great, but you’re probably wondering, “How can I meet the domestic content requirement?”
To claim the domestic content bonus credit, you’ll need to certify your project uses domestic content products and product components, then file the certification with your annual tax return. The product percentage requirement will increase annually, so be sure to consult your tax advisor for the most up-to-date guidance.
Get Started!
Thinking about installing solar on your metal roof? Make sure to source American-made attachments to maximize your tax credit eligibility under the Inflation Reduction Act. Plus, you’ll be supporting U.S. manufacturing and the transition to cleaner, renewable energy.
The IRA and Domestic Content Bonus Credit are meant to make clean energy more affordable for Americans, create new jobs and help building owners and homeowners embrace renewable energy for their projects. It’s a win-win-win for Americans, U.S. manufacturers and the planet. Questions? Check out the IRS website on Domestic Content Bonus Credit.
*Visit www.s-5.com for full warranty information.
