Ivy Energy celebrates the Inflation Reduction Act (IRA), which has passed the U.S. Senate and House and was signed into law by President Biden on August 16, 2022. This act will be the largest climate investment in U.S. history. It will kickstart new incentive programs, investment in renewable energy, and initiatives that combat climate change. Ensuring that solar, storage, and the jobs that come with it are here to stay. Multifamily buildings will have new financing opportunities to deploy clean energy resources and provide benefits to tenants. However, considering the act is nearly 800 pages long, we’re breaking down the essential details for solar on multifamily and commercial real estate.
What Does the Inflation Reduction Act Mean for Multifamily and Commercial Solar Projects?
Solar Investment Tax Credit (ITC) Changes:
- For residential solar, the bill reverts back to a 30% ITC for all systems placed in service after December 31, 2021, through the end of 2032. Any customer who got permission to operate (PTO) in 2022 would be able to claim a 30% ITC instead of the 26% they previously expected.
- In 2033, it drops to 26%.
- In 2034, it drops to 22%.
- For commercial solar larger than 1 MW, projects would need to pay prevailing wage and have 10%-15% of labor hours filled by apprentices to qualify for the 30% ITC. Otherwise, the credit is 6%. This is only available for projects beginning construction 60 days after the Department of Treasury outlines the labor metrics.
- Projects smaller than 1 MW qualify for 30% without any workforce requirements.
- This applies through the end of 2025, at which point the Treasury Department will analyze the greenhouse gas emission goals and decide on the continuation of the commercial solar and storage ITC for the following seven years. Their goal is to maintain the credits until emissions from the electric sector drop 75% below 2022 levels.
- Eligibility for the commercial ITC changes in 2025 from a list of technologies to any generation technology with carbon emissions at or below zero, but solar qualifies in either framework.
- An additional 10% is available for using domestic content. This requires all steel and iron to be sourced from the U.S. and 40-55% of the value of manufactured products to be from the U.S.
- There is a direct pay provision to receive cash rather than a tax credit, but only for a non-profit or a state, local, or tribal government, and not for projects installed in 2022. Projects larger than 1 MW must meet workforce requirements to qualify for direct pay. Low-income residential customers with no tax appetite do not qualify for direct pay. However, credits are transferable to a third party in a cash transaction, so customers without tax appetite that do not qualify for direct pay can sell the credits.
- Tax credits not used in the first year can be carried forward to future years.
ITC Eligibility:
- Standalone battery systems are eligible for the ITC, in addition to batteries paired with solar whether they are powered by PV or not. Residential systems must be on a “dwelling unit” used as a residence by the taxpayer and be at least 3 kWh. Commercial systems must be at least 5 kWh.
- Microgrid controllers are also eligible for the ITC, as are interconnection facilities for projects under 5 MW.
- Solar water heating eligibility remains, but commercial pools were not added.
Renewable Electricity Production Tax Credit (PTC):
- The PTC is available for solar with no size limit as an alternative to the ITC, at a rate of 2.5 cents/kWh if the workforce requirements are met and 0.5 cents/kWh if they are not.
- If a system is installed on a brownfield or in an area with significant fossil fuel employment, the ITC increases by 10%, or the PTC increases by 10%.
New Credits and Grants:
- There is a new manufacturing credit of 7 cents/watt for module assembly. Separate credits are available for module components, batteries, and inverters.
- $2.8 billion in block grants for low-emission technologies, workforce development, and climate adaptation and resilience.
- The IRA increases the Department of Energy’s Loan Program Office’s loan authority for these programs, appropriates additional funds for credit subsidies, and establishes a new LPO program focused on the reutilization of energy infrastructure
The Next Step in Mass Adoption of Solar
Not only does the Inflation Reduction Act extend tax credits and grants making renewable energy more affordable, but it also develops the solar workforce, expands options for funding, and incentivizes more real estate owners to invest in solar. We are thrilled to see these changes and the long-term impact they will have on the mass adoption of solar for all properties. Our team at Ivy is well-versed in how these changes apply to multifamily solar and multi-tenant commercial solar projects. So, if you’re unsure of what your current or future project will qualify for, please reach out to us. We can provide guidance, as well as a revenue estimate for your property.
Pioneering the Future of Multi-Tenant Solar Energy Management
2024 was a trailblazing year for Ivy Energy, where we shattered barriers, redefined possibilities, and delivered innovative solutions to address the multi-tenant solar split incentive challenge. By driving product advancements, forging impactful partnerships, and scaling operational processes, we empowered multi-tenant properties to embrace clean energy with confidence.
A Year of Growth and Market Expansion
Ivy has grown its active project pipeline 450% compared to 2023, with a line of sight to clear +600% in active projects by the end of the year. Our tech-enabled solutions empower more communities than ever. With $18M in Series A funding (Read more) and the strategic acquisition of Glow Energy (Read more), we are poised for unprecedented growth and impact. This investment enables us to enhance our technology, streamline operations, and expand our reach into new markets nationwide.
Entering new markets with increased resources allows us to address diverse energy challenges and deliver tailored solutions to property owners and tenants. Additionally, the launch of our consulting arm provides expert guidance for our clients and partners to save money and enhance ROI while navigating intricate solar investments.
Meaningful Operational Updates
At Ivy, innovation isn’t just about technology—it’s about creating digital tools that empower our clients and their tenants:
- PropTech Integrations: Partnered with RealPage, Entrata, and Yardi to automate rent roll syncing, move-in/move-out updates, and direct charge posting to resident ledgers. These integrations reduce monthly processing time by up to 2 hours per property while enhancing data accuracy and operational efficiency.
- NEM Credit Delay Optimization: The Utility Coordination team adopted the CPUC informal complaint process to reduce delays in NEM activation after PV solar system commissioning. This improvement cut the average resolution time for delayed NEM credits from 123 days in 2023 to 49 days in 2024, allowing property owners to see Net Operating Income over two months sooner on average.
Platform Advancements that Lead the Industry
Our engineering team broke new ground, ensuring our platform stays ahead of the curve:
- Migrated to a new infrastructure processing system for faster processing and further automation improvements across operational features.
- Introduced IvyDual in response to regulatory requirements in California, which allows us to enter new markets where consolidated billing is not viable.
- Achieved SOC 2 Compliance, reaffirming our commitment to data security. (Read more)
- Built initial public API for Conservice integration and new utility data access pathways, strengthening our platform’s versatility and reliability.
Empowering Positive Experiences with CX
At Ivy Energy, our customers rely on us as true partners in their clean energy journey, helping them achieve long-term NOI growth while providing exceptional support for property owners and tenants. We consistently deliver this experience by simplifying complex utility processes and offering our white-glove service that ensures our clients feel supported, informed, and empowered to succeed. This year, Ivy’s Customer Experience Team launched two significant platforms:
- Ivy Implementation Portal: A step-by-step, transparent portal that simplifies solar implementation for our clients and partners across multiple organizations. (Watch a walkthrough of the new portal here.)
- Resident Help Center: Educate tenants about the solar program with helpful resources and offer direct support online or by phone. (Explore the Help Center)
Shaping the Future Through Thought Leadership
In 2024, Ivy Energy reinforced its position as an industry leader; our Virtual Grid 3.0 impressed the judges and earned first place in Solar Power World’s “Best in Show” award for large-scale solar innovation. (Read more)
Leadership team members Alex Dogan, Tanya Kuhn, and Sean Nam were celebrated in San Diego Business Journal’s Leaders of Influence in Technology 2024 for their contributions to advancing sustainable energy. (Read more) Ivy was also featured in Alt Energy Magazine (Read more), San Diego Business Journal (Read more), and on Solar Academy. (Read more)
Logan Carter showcased Ivy’s groundbreaking innovations in a main stage speech at Cretech NY (Watch here), an engaging appearance on the IMN Podcast (Listen here), and a deep-dive interview with Chris Moreno, also known as “Mr. PropTech.” (Watch here) Ivy’s policy team further expanded its influence by authoring a Model VNEM Whitepaper, a critical guide to enabling multi-tenant solar models nationwide. (Read the Whitepaper).
Measurable Environmental Impact
This year, Ivy Energy amplified its environmental contributions, with contracted units in implementation set to offset an astounding 109 million pounds of CO2. Meanwhile, active units have already offset 9 million pounds of CO2, demonstrating our ongoing dedication to reducing carbon emissions.
Looking Ahead to 2025
As we celebrate 2024’s successes, we are always looking to the future. In 2025, we’ll continue to push boundaries, deliver innovations that empower our clients, improve tenant experiences, and lead the multi-tenant housing sector toward a sustainable future.
A Message from Dover Janis, CEO of Ivy Energy
“2024 was a year of progress and adaptation. While utility-caused delays challenged our growing pipeline, our focus on agile problem-solving reduced their impact and kept the market moving forward. This is a testament not only to the dedication and focus of our team but also to the strong macro-level foundation that the onsite energy business model provides for real estate owners, even in the face of monopoly-driven resistance. With a large and expanding customer base and hundreds of projects, we have continued to validate the transformative potential of clean energy solutions for shared communities. I’m incredibly proud of our team—now among the most mature, knowledgeable, and experienced in the industry—as we trail blaze the path forward. The market is primed to grow and drive transformative change in local communities. I’m deeply grateful to our partners and customers, whom we have the privilege of serving every day as we continue to lead the way.”
.png)
