Any concern for repeal of IRA solar/energy credits?

[Jeremy3292]

My Tesla solar/energy install is likely not happening until January, thereby just missing the 2023 tax year. I hadn't really thought about this until recently, but now my concern is I will outlay $50k in January 2024 and then the IRA tax credits will be repealed some time in 2024 and I will lose out on approx $15k in tax credits.

I know R's tried to repeal the IRA tax credits in the debt limit bill earlier this year, but it was removed in compromise with Biden. It seems the repeal of the IRA tax credits may not even be so popular within the Republican party either, other than hardliners of course. The debt limit has now also been suspended until 1/1/25 after the election. However, according to my research Congress has broad authority to change the tax code mid-year and even early in the next year for the preceding year (e.g. Jan 2025 for tax year 2024). So should they want to repeal the IRA tax credits effective 1/1/24 they certainly could.

My thoughts are the IRA tax credits are unlikely to change during an election year (2024), but could change in 2025 sometime should the R's take control of Congress and the White House, which then wouldn't matter for my scenario. I do also think it is unlikely one party controls the House, Senate, and White House anyways after the elections this fall, thus making it unlikely one party could jam through their agenda one way or the other.

Is my concern unwarranted? I realize anything can happen in politics, but just curious what everyone's thoughts are on this from both sides of the aisle.

 

[David_Cary]

I would not count on tax credits. $50k is really high - does that make sense even with the tax credit?
Maybe schedule install in Late November when the tea leaves will be easier to read?
Or maybe don't install something so expensive which is really hard to imagine is a logical financial decision.
I live in NC with I suspect similar electric rates. I was able to do a $36k system for $18k after utility and tax credits. It was viable because of low interest rates at the time and creative math on my part. It also involved not moving for 15 years which is unlikely now at this point but I imagine there will be some resale value for the system.
My system saves me about $1500 a year. That is a 12 year payback ignoring time value of money. The time value of money can't be ignored anymore. And you are talking a net double cost even if you get the tax credit. Either a really big system (mine is 13kw) or expensive or batteries that don't get you any payback and depreciate much faster.

 

[Jeremy3292]

The cost of the system is $50k meaning tax credit is $15k. This is all cash for me, no loan but man it would suck for them to repeal that after the fact lol.

 

[David_Cary]

I got the numbers. Are you sure they make sense? Cash could be making money and the time value of money matters whether you are borrowing or not. Opportunity cost.
And cost is not just money, it can be environmental benefit. That money on a community solar project might go a lot further.