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Inflation Reduction Act Solar Energy and Energy Storage Provisions Summary

Status As of August 16 2022 the Inflation Reduction Act IRA has passed in both the Senate and the House of Representatives and has been signed by the president The summary below reflects what is in the final draft of the legislation About this Summary CONTENTS 01 About 02 Residential some key provisions in the Inflation Reduction Act IRA As more details emerge SEIA will publish additional in depth guides to the enacted provisions for member companies SEIA is working with member companies to implement these provisions with relevant federal agencies to ensure that the guidance and regulations issued are workable When agencies issue final guidance and regulations SEIA will 04 Utility Scale update the detailed guides for member companies Nothing 06 Manufacturing Members can view a more detailed summary here 07 Additional If your company is not a member of SEIA you can join here and Other Provisions 07 More Info 1 This summary is intended only to provide a quick overview of in this summary should be interpreted as tax or legal advice SEIA members can email their questions to membership seia org and SEIA will work to address those questions in updated documents and a forthcoming Frequently Asked Questions page

Solar Energy and Energy Storage Provisions of the IRA Residential Section 25D Investment Tax Credit for Direct Ownership Solar cash sales and loan nanced sales to homeowners The personal income tax credit for the installation of solar energy property is extended and raised to 30 with the step down beginning in 2033 when it drops to 26 Stand alone energy storage also becomes eligible for this credit for batteries at with at least 3 kilowatt hours kWh of capacity The stand alone battery credit only applies to expenditures made after December 31 2022 There is no direct pay or refundability It continues to function as it has in the past Investment Tax Credit for Third Party Owned Residential Systems Third party owned TPO residential systems are financed and receive the ITC via the business tax code For details on the business ITC see the next section As before a system is directly owned by an individual taxpayer and claims the personal tax credit or is TPO and has the tax credit claimed by the third party owner not both Section 25C Investment Tax Credit for Clean Energy Property Extended at 30 through 2032 beginning with property placed in service after 2022 lifetime cap replaced with an annual cap of 1 200 except for heat pumps heat pump water heaters biomass stoves and biomass boilers which are capped at 2 000 in aggregate Credit also applies to improvement to or replacement of a panelboard sub panelboard branch circuits or feeders that have capacity of at least 200 amps and are installed to enable the installation or use other eligible property under this Section 25C Residential Ef ciency and Electri cation Rebates The IRA provides 4 3 billion to State Energy Offices to establish rebates for a variety of home energy upgrades under the Home Owner Managing Energy Savings HOMES rebate program Rebates for home energy retrofits up to the lesser 8 000 per home or 80 of project cost if the project saves at least 35 Lesser amounts available if projects save less than 35 Multi family rebates are also supported with different rebate amounts Caps can increase for low and moderate income families with approval of the Secretary 2

While all ultimate rebates are subject to state implementation the legislation sets the following maximum values but those values could be increased by states for low and moderate income households Single Family Multi Family For retrofit projects modeled energy savings at least 20 and up to 35 the lesser of 2 000 or 50 of project costs For retrofit projects modeled energy savings more than 35 the lesser of 4 000 or 50 of project costs For measured energy savings of at least 15 an amount scaled relative to average home energy use in the state where the project is installed where 2 000 would awarded for 20 energy savings or 50 of project cost For retrofit projects modeled energy savings at least 20 and up to 35 2 000 per dwelling unit and maximum of 200 000 per multifamily building For retrofit projects modeled energy savings more than 35 4 000 per dwelling unit and a maximum of 400 000 per multifamily building For measured energy savings of at least 15 an amount scaled relative to average home energy use in the state where the project is installed where 4 000 would awarded for 20 energy savings or 80 of project cost Cannot be combined with High Efficiency Electric Home Rebate Program High Ef ciency Electric Home Rebate Program The IRA provides 4 275 billion for grants to State Energy Offices and 224 million to Indian Tribes to establish rebate programs for home electrification Importantly this explicitly includes rebates up to 4 000 for electric load service center upgrades i e main panel upgrades and up to 2 500 for electric wiring These provisions are capped at 50 of qualifying costs for households making between 80 and 150 of area median income It appears that households earning more than 150 of area median income are not eligible for these rebates While all ultimate rebates are subject to state implementation the legislation sets the following maximum values The Lesser of Upgrade Maximum Rebate Amount Maximum Rebate as Percent of Cost Households 80 150 of Area Median Income Households Less Than 80 of Area Median Income Heat pump water heater Heat pump for HVAC Electric stove cooktop range oven or heat pump clothes dryer Electric load service center Insulation air sealing and ventilation Electric wiring 1 750 8 000 840 4 000 1 600 2 500 50 50 50 50 50 50 100 100 100 100 100 100 Maximum total across all upgrades 14 000 50 100 For multi family properties if at least 50 of resident households are 80 to 150 of area median income For multi family properties if at least 50 of resident households are less than 80 of area median income 3

Utility Scale Commercial Industrial Non Pro t Government Etc and Third Party Owned Residential The business investment tax credit is extended and lifted to 30 for projects that have started or start construction before the end of 2024 and the credit becomes available to stand alone storage Solar also becomes eligible for the production tax credit which is currently at 0 026 kWh for 2022 and rises with inflation After 2024 the credit transitions to a tech neutral structure Current Law pre IRA 2022 2023 2024 2025 2026 2027 2028 2029 2030 26 22 10 10 10 10 10 10 10 ITC for Stand Alone Storage 0 0 0 0 0 0 0 0 0 PTC for Solar kWh 0 0 0 0 0 0 0 0 0 ITC for Solar Source SEIA Summary of Inflation Reduction Act H R 5376 Projects that begin construction in 2022 and are online before the end of 2025 are eligible for 26 Projects that begin construction in 2023 and are online before the end of 2025 are eligible for 22 Projects that begin construction after 2023 are eligible for 10 Additional transition guidance will have important implications The PTC is adjusted for inflation each year by the IRS The levels reported for years 2023 2035 assume annual inflation of 2 for illustrative purposes Inflation Reduction Act ITC and PTC Under the IRA projects will be able to choose the ITC or PTC Both credits come with potential adders for meeting certain domestic content requirements locating in energy communities or allocated credits for being on qualified low income property The level of the base credits and adders are shown in the tables below Stand alone storage is eligible only for the ITC Both ITC and PTC credits become transferable The ITC becomes available for costs of interconnection for projects with a net output of less than 5 MWac Direct pay becomes available for state and tribal governments Alaska native corporations certain tax exempt entities and rural cooperatives All timelines below are subject to specific placed in service and start construction deadlines and documentation requirements Details are available to SEIA members 4

Commercial ITC Under IRA 50 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 30 Projects Under 1 MWac 100 75 30 30 30 30 30 30 30 30 30 30 30 22 5 15 0 Bonus for Meeting Domestic Content Minimums 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Bonus for Siting in Energy Community 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Low Income Community as De ned by the New Markets Tax Credit or on Indian Land 10 10 10 10 10 10 10 10 10 10 10 7 5 5 0 Quali ed Low Income Residential Building Project or Quali ed Low Income Economic Bene t Project 20 20 20 20 20 20 20 20 20 20 20 15 10 0 Base ITC Allocated Low Income Bonus Projects Over 1 MWac that Begin Construction Less than 60 Days After Dept of Treasury Issues Guidance 30 30 30 Bonus for Meeting Domestic Content Minimums 10 10 Bonus for Siting in Energy Community 10 10 Low Income Community as De ned by the New Markets Tax Credit or on Indian Land 10 10 Quali ed Low Income Residential Building Project or Quali ed Low Income Economic Bene t Project 20 20 Base ITC Allocated Low Income Bonus for Projects Under 5 MWac Projects Over 1 MWac that Begin Construction 60 Days After Dept of Treasury Issues Guidance Base for All Projects 6 6 6 6 6 6 6 6 6 6 6 4 5 3 0 Bonus for Meeting Domestic Content Minimums 2 2 2 2 2 2 2 2 2 2 2 1 5 1 0 Bonus for Siting in Energy Community 2 2 2 2 2 2 2 2 2 2 2 1 5 1 0 6 Base ITC Adders for Projects that Meet Labor Requirements 24 24 24 24 24 24 24 24 24 24 24 18 12 0 Bonus for Meeting Domestic Content Minimums 8 8 8 8 8 8 8 8 8 8 8 6 4 0 Bonus for Siting in Energy Community 8 8 8 8 8 8 8 8 8 8 8 6 4 0 Low Income Community as De ned by the New Markets Tax Credit or on Indian Land 10 10 10 10 10 10 10 10 10 10 10 7 5 5 0 Quali ed Low Income Residential Building Project or Quali ed Low Income Economic Bene t Project 20 20 20 20 20 20 20 20 20 20 20 15 10 0 24 Base ITC Allocated Low Income Bonus for Projects Under 5 MWac Source SEIA Summary of Inflation Reduction Act H R 5376 Actual phased down is based on the later of the dates shown or the year after electric sector CO2 emissions drop 75 below 2022 levels Must include 100 domestic iron steel and an increasing percent of manufactured goods over time Allocated credits will be based on an application and award process that will have to be developed by the Secretary Maximum of 1 8 GWac year Bonus credits available for projects placed in service after December 31 2022 PTC Under IRA Projects Under 1 MWac Base PTC 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2 6 kWh 2 7 kWh 2 7 kWh 2 8 kWh 2 8 kWh 2 9 kWh 2 9 kWh 3 0 kWh 3 0 kWh 3 1 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 2023 0 32024 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh 0 3 kWh Bonus for Meeting Domestic Content Minimums Bonus for Siting in Energy Community 100 75 2022 2 7 kWh 2 7 kWh 0 3 kWh 0 3 kWh Bonus for Siting in Energy Community 0 3 kWh 0 3 kWh Base PTC 2 6 kWh 0 2033 2034 2035 2036 3 2 kWh 3 2 kWh 2 4 kWh 1 6 kWh 0 0 kWh 0 3 kWh 0 3 kWh 0 2 kWh 0 2 kWh 0 0 kWh 0 3 kWh 0 3 kWh 0 2 kWh 0 2 kWh 0 0 kWh Projects Over 1 MWac that Begin Construction Less than 60 Days After Dept of Treasury Issues Guidance Bonus for Meeting Domestic Content Minimums 50 Projects Over 1 MWac that Begin Construction 60 Days After Dept of Treasury Issues Guidance Base for All Projects 0 5 kWh 0 5 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 6 kWh 0 5 kWh 0 3 kWh 0 0 kWh Bonus for Meeting Domestic Content Minimums 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 0 kWh 0 0 kWh 0 0 kWh Bonus for Siting in Energy Community 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 1 kWh 0 0 kWh 0 0 kWh 0 0 kWh Base PTC 0 5 kWh Adders for Projects that Meet Labor Requirements 2 1 kWh 2 2 kWh 2 2 kWh 2 3 kWh 2 3 kWh 2 3 kWh 2 4 kWh 2 5 kWh 2 5 kWh 2 6 kWh 2 6 kWh 1 9 kWh 1 3 kWh 0 0 kWh Bonus for Meeting Domestic Content Minimums 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 3 kWh 0 3 kWh 0 2 kWh 0 1 kWh 0 0 kWh Bonus for Siting in Energy Community 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 2 kWh 0 3 kWh 0 3 kWh 0 2 kWh 0 1 kWh 0 0 kWh Base PTC 2 1 kWh Source SEIA Summary of Inflation Reduction Act H R 5376 The PTC is adjusted for inflation each year by the IRS The levels reported for years 2023 2035 assume annual inflation of 2 for illustrative purposes Actual phased down is based on the later of the dates shown or the year after electric sector CO2e emissions drop 75 below 2022 levels Must include 100 domestic iron steel and an increasing percent of manufactured goods over time Bonus credits available for projects placed in service after December 31 2022 5

Manufacturing The IRA establishes two credits for manufacturers 1 A 30 investment tax credit Section 48C for eligible investment costs in facilities and equipment and 2 A manufacturing production credit for certain components based on the volume of product manufactured Manufacturers can only seek to take one or the other that is a manufacturer cannot claim the investment credit and then claim the production credit for product from the same factory Ten billion dollars are allocated for the Section 48C tax credits and up to six billion dollars can go to projects located outside of census tracts or adjacent tracts where a coal mine closed after 1999 or a coal fired power plant was retired after 2009 To receive the full 30 credit a project must meet prevailing wage and apprenticeship requirements Otherwise the credit will be six percent There is also no direct pay option with limited exceptions and manufacturers must apply and be chosen for the Section 48C tax credit Credits are based on application and award process The production credit specifies different rates for various products as specified in the table below Manufacturing production credits are also eligible for direct pay for five consecutive years 100 75 50 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Solar PV Modules 7 Wdc 7 Wdc 7 Wdc 7 Wdc 7 Wdc 7 Wdc 7 Wdc 7 Wdc 5 3 Wdc 3 5 Wdc 1 8 Wdc 0 0 Wdc Thin Film PV Cells 5 Wdc 5 Wdc 5 Wdc 5 Wdc 5 Wdc 5 Wdc 5 Wdc 5 Wdc 3 8 Wdc 2 5 Wdc 1 3 Wdc 0 0 Wdc Crystalline Silicon PV Cells 4 Wdc 4 Wdc 4 Wdc 4 Wdc 4 Wdc 4 Wdc 4 Wdc 4 Wdc 3 0 Wdc 2 0 Wdc 1 0 Wdc 0 0 Wdc Crystalline Silicon PV Wafers 12 m2 12 m2 12 m2 12 m2 12 m2 12 m2 12 m2 12 m2 9 m2 6 m2 3 m2 0 m2 Solar Grade Polysilicon 12 kg 12 kg 12 kg 12 kg 12 kg 12 kg 12 kg 12 kg 9 kg 6 kg 3 kg 0 kg 0 40 m2 0 40 m2 0 40 m2 0 40 m2 0 40 m2 0 40 m2 0 40 m2 0 40 m2 0 30 m2 0 20 m2 0 10 m2 0 m2 Polymer Backsheets Inverters Central Inverter 0 25 Wac 0 25 Wac 0 25 Wac 0 25 Wac 0 25 Wac 0 25 Wac 0 25 Wac 0 25 Wac 0 19 Wac 0 13 Wac 0 06 Wac 0 00 Wac Utility Inverter 1 50 Wac 1 50 Wac 1 50 Wac 1 50 Wac 1 50 Wac 1 50 Wac 1 50 Wac 1 50 Wac 1 13 Wac 0 75 Wac 0 38 Wac 0 00 Wac Commercial Inverter 2 00 Wac 2 00 Wac 2 00 Wac 2 00 Wac 2 00 Wac 2 00 Wac 2 00 Wac 2 00 Wac 1 50 Wac 1 00 Wac 0 50 Wac 0 00 Wac Residential Inverter 6 50 Wac 6 50 Wac 6 50 Wac 6 50 Wac 6 50 Wac 6 50 Wac 6 50 Wac 6 50 Wac 4 88 Wac 3 25 Wac 1 63 Wac 0 00 Wac Microinverter 11 00 Wac 11 00 Wac 11 00 Wac 11 00 Wac 11 00 Wac 11 00 Wac 11 00 Wac 11 00 Wac 8 25 Wac 5 50 Wac 2 75 Wac 0 00 Wac Torque tube or longitudinal purlin 0 87 kg 0 87 kg 0 87 kg 0 87 kg 0 87 kg 0 87 kg 0 87 kg 0 87 kg 0 65 kg 0 44 kg 0 22 kg 0 00 kg Structural fasteners 2 28 kg 2 28 kg 2 28 kg 2 28 kg 2 28 kg 2 28 kg 2 28 kg 2 28 kg 1 71 kg 1 41 kg 0 57 kg 0 00 kg Electrode active materials 10 10 10 10 10 10 10 10 7 5 50 2 5 0 Cells kWh 35 35 35 35 35 35 35 35 26 3 17 5 8 8 0 Modules kWh 10 10 10 10 10 10 10 10 7 5 5 2 5 0 Modules that don t use cells kWh 45 45 45 45 45 45 45 45 33 8 22 5 11 3 0 Critical Materials 10 10 10 10 10 10 10 10 7 5 5 2 5 0 Trackers Batteries Source SEIA Summary of Inflation Reduction Act H R 5376 20 20 20 20 20 20 20 20 20 20 20 15 10 0 Central inverter inverter greater than 1 000 kWac Utility inverter suitable for commercial or utility scale at least 600 volts greater than 125 kWac but not greater than 1 000 kWac Commercial inverter suitable for for commercail or utility scale 208 480 600 or 800 volts three phase power and greater than 20 kWac but not greater than 125 kWac Residential inverter suitable for a residence 120 or 240 volts single phase capacity not greater than 20 kWac Microinverter suitable to connect with one solar module 120 or 240 volts single phase or 208 or 480 volts three phase capacity not greater than 650 Wac Percent of production cost 6

Additional Provisions The IRA contains many other provisions important to the energy transition of direct or indirect interest to the solar energy and energy storage industries These include the provisions listed below 500 million for the Defense Production Act some of which could be used for solar manufacturing Greenhouse Gas Reduction Fund totaling 29 billion overseen by the Environmental Protection Agency Climate Pollution Reduction Grants to state and local governments totaling 5 billion Environmental and Climate Justice Block Grants 3 billion for disadvantaged communities Department of Energy Loan Program Office gets an additional 40 billion in commitment authority 2 billion in loan authority for new transmission construction in designated national interest corridors 760 million for the Department of Energy to issue grants to state local or tribal entities to facilitate siting of high voltage interstate transmission Solar Right of Way Restrictions on Department of Interior lands right of way can only issue if an oil and gas lease sale has been held in previous 120 days and certain acreage thresholds have been offered in previous year Additional 1 billion for rural renewable energy electrification loans and expansion of the program to include storage Additional 1B for REAP with total grants limited to 50 of the total cost of an eligible project 9 6B for loans and financing for rural co ops to purchase renewable energy generation zero emission systems and related transmission limited to 25 of total cost Incentives for build out of electric vehicle charging networks Extension expansion and changes to electric vehicle tax credits including a new credit for purchasing used EVs Find Out More SEIA will continue to provide detailed descriptions of critical provisions as agency guidance and implementing regulations are issued These detailed guides are available to SEIA member companies 7