ira-survey-white-paper

THE 2022 INFLATION REDUCTION ACT

Which credits interest solar owners the most?
Survey shows that 58% of solar owners report an increased interest in energy-efficiency investments in response to the new credits.

Overview

Despite its name, the Inflation Reduction Act (IRA) of 2022 is, in fact, the most significant climate law to be passed by Congress and seeks to stamp out rising prices, reduce emissions, and incentivize renewable energy and energy efficiency upgrades in the home. Its spending package dedicates more than $739 billion to solving our nation’s biggest issues, including healthcare costs, climate change, and inflation.
In response to the new legislation, we polled more than 350 Palmetto solar customers to find out which energy-efficiency home and vehicle upgrades now incentivized by the IRA they’re most likely to invest in—from heat pumps to electric vehicles, additional solar panels, solar battery storage, and more—and which investments might impact their lives the most.

Key Findings

Survey Methodology

To understand how the new credits available through the Inflation Reduction Act of 2022 might impact solar homeowners’ interest in energy efficiency upgrades, we sent a survey to Palmetto customers across the U.S. who purchased a solar energy system in or prior to September of 2022, when the survey was conducted.

358 residential solar owners

More than 350 Palmetto solar customers from 20+ states responded to the survey. Based on the contact information provided, we were able to identify the location, solar activation status, and solar energy system size for 87% of respondents.
Given the solar installation process—or the time between solar purchase, installation, and activation, when a solar system can begin producing power—approximately 20% of respondents were not yet producing power at the time the survey was conducted.

While the average system size was 24 panels, more than 50% of respondents purchased a 16-30 panel solar energy system.

Homeowners’ satisfaction with the energy efficiency in their home increases over the course of solar ownership

When responses to the question, “How satisfied are you with the energy efficiency in your home?”, were mapped to respondents’ solar ownership status, we found that the percentage of homeowners who indicated that they are either satisfied or very satisfied with the energy efficiency in their home increases over the course of solar ownership.

While satisfaction dips in year two before increasing in year three, we found that solar homeowners' interest in energy-efficiency upgrades followed the same trend, indicating this might be a time when solar homeowners seek to further optimize their energy efficiency.

Adoption of home energy-efficiency upgrades among solar owners has been low, but interest is now strong

More than 70% of respondents named price as a primary factor in the decision to invest in energy-efficient technology, while 55% named incentives and credits.

Now that the Inflation Reduction Act incentivizes energy-efficiency upgrades, including home energy audits, high-efficiency (HE) appliances, and building envelope improvements, we are seeing a significant difference between adoption rates and interest—especially for solar battery storage and electric vehicles.

Smart home battery storage shows the highest opportunity for growth

While regional differences emerged for both the adoption of and the interest in home energy-efficiency upgrades, solar battery storage showed the greatest opportunity for market growth, having the lowest adoption rate (5%) and the highest interest rate (61%).
Among the home energy-efficiency upgrades presented in our survey, solar battery storage captured the highest level of interest in four out of five U.S. markets. (The exception was the Northeast, where interest in battery storage came in second to HE appliances at 57% vs. 59% respectively.)
Overall interest was highest in the Western and Midwestern states, where 70% of homeowners indicated interest in smart home battery storage knowing that incentives may now be available.

Electric vehicles and battery storage have the greatest perceived impact on reducing carbon footprints, according to solar owners

When it comes to environmental impact, solar owners believe that electric or hybrid vehicles and smart home battery storage would have the greatest impact on reducing their carbon footprint—even over additional solar panels—with about a quarter of respondents voting for each. Narrowly behind them were high-efficiency appliances, which many solar owners have already invested in.

Battery storage provides the greatest perceived impact on long-term financial savings, according to solar owners

When asked which upgrades might have the greatest impact on their financial savings, respondents favored solar battery storage and additional solar panels, revealing an awareness of the unique benefits each investment can provide. More than a quarter (26.5%) of solar owners believe battery storage will have the greatest long-term impact on their financial savings.

High-efficiency appliance upgrades offer the greatest impact on one’s lifestyle and comfort, according to respondents

One more insight from the survey was that high-efficiency appliances, rather than battery storage or EVs, had the greatest perceived impact on one’s comfort and lifestyle.

This makes sense, given that these are everyday appliances that people use and interact with regularly.

Price, incentives, and savings are key factors when deciding to invest in energy-efficient home or vehicle upgrades

We wanted to understand the factors that are going to motivate homeowners to invest in these home upgrades, whether it be price, environmental impact, or something else.

It turns out that price is clearly the most important factor when it comes to evaluating future investments in home or vehicle energy-efficiency upgrades, with more than 70% of respondents choosing price as their most important factor.

That said, more than half of all respondents reported that the incentives and credits (55%), along with the savings they receive (50%), will also be important, if not the most important, factor when determining which upgrades to invest in.

While certainly not insignificant, both environmental impact and availability came second to last and last, respectively.

New incentives available through the Inflation Reduction Act may drive increased interest and demand for energy efficiency upgrades

Our results indicate that more than 58% of solar homeowners show an increased interest in energy-efficiency investments in response to the Inflation Reduction Act. An additional 19% indicated that they were unsure and need more information.

Some of the respondents that claimed no to low impact shared that their interest in energy-efficiency upgrades preceded the Inflation Reduction Act, making the new credits a "nice-to-have" rather than a key driver.

Based on the responses, it's clear that homeowners have many questions about the Inflation Reduction Act and how the new credits and incentives might benefit their daily lives.

Learnings

Solar tax credits have been around for nearly 20 years now, and many homeowners who have gone solar have done so because of the value these tax credits provide.
With this survey, we wanted to understand the motivations of homeowners who have already taken advantage of clean energy technologies, and who might be interested in furthering their investment in their home or reducing their carbon footprint even more so than they already have.

With the Inflation Reduction Act, the federal government has largely expanded the potential savings that homeowners can take advantage of when investing in environmentally-friendly products.
Although many solar owners are satisfied with their home’s overall energy efficiency, there is still room for improvement among many homeowners—even those that have already invested in solar.

Finally, when the rubber meets the road, price is the number-one factor when it comes to deciding what energy-efficient upgrades to invest in over others, followed closely by incentives and savings.