On November 29, 2022 the IRS revealed long-awaited guidance on the wage and apprenticeship requirements for commercial projects. This guidance was announced as a cornerstone aspect of the wide-ranging Inflation Reduction Act and all of the progressive climate legislation that it contained.
Under the IRA, the tax credit for commercial solar projects was increased and extended, but with provisions and bonus kickers that are based on wage and apprenticeship requirements. The goal of these requirements are to ensure that the growing renewables sector would continue to grow for many years, but to do so with high-quality standards and good-paying jobs that attract strong demand from installers, engineers, and other project professionals.
Exact Solar, as a local residential and commercial solar installer in Southeast Pennsylvania and New Jersey, has always been focused on quality for our installation work. We applaud the measures in this bill for both the opportunity to increase the value of the tax credit on commercial projects, but also to ensure that this exciting work is done with higher standards for quality and wages.
The guidance issued by the IRS provides better clarity on requirements for solar installation apprenticeship requirements, including the apprenticeship labor hour, ratio, and participation requirements. It’s very important to note that these provisions have very little near-term impact on projects that are under 1 megawatt (1,000 kW) solar installations. Smaller commercial projects under this size do not have the same formulas and requirements required, an acknowledgement that this sector will have much more difficulty meeting the prevailing wage and apprenticeship requirements. There is more guidance to come over the next few months from the IRS, covering all of the provisions for climate and energy that were announced under the Inflation Reduction Act.