Incentives for Commercial Solar
With electricity prices rising to new highs and electricity becoming one of the most significant overhead costs businesses have to deal with, commercial solar has become an increasingly popular investment. Reducing or eliminating costly electricity bills is too good of an opportunity to pass up. However, business owners may experience some hesitancy due to the sizable investment. Fortunately, there are a number of pathways to lessening commercial solar installation costs.
Businesses interested in purchasing solar panels have multiple incentives to take advantage of to recover a portion of their installation costs. Recovering these costs decreases the ROI period and makes sure that you can start reinvesting your savings as soon as possible.
- The Federal Investment Tax Credit
The Federal Investment Tax credit is a generous 30% tax credit commercial solar owners can recover on the cost of a solar installation placed into service during the tax year. The tax credit was previously 26% and was set to fall to 22% in 2023, but was recently renewed. Businesses that make use of the tax credit could recover almost a third of their installation costs, making solar panels more affordable than ever.
- 85% federal depreciation
Whilst the 85% federal depreciation is an extremely valuable method of recovering costs on a variety of investments, from buildings to equipment, to furniture, businesses will appreciate that the federal government particularly incentivizes businesses to purchase commercial solar panels by offering a great depreciation schedule. You could recover costs in as little as five years by looking into depreciation.
- State-wise rebates and incentives.
Once you’ve made the most of your federal tax credit and federal depreciation, it’s worth looking into commercial solar incentives available in your state. For example, California offers their own tax depreciation that could recover further thousands of dollars from your investment.
4. Net Metering
Net metering is a great way to save money on electricity bills with the excess energy you produce during peak sunshine hours. Instead of the electricity going to waste, it goes back into the grid. Each unit of energy has a rate, which is discounted from the cost of electricity you consume from the grid during the night or on days when your solar panels aren’t producing enough electricity due to overcast weather conditions. NEM 2.0 is the current net metering policy which offers favorable rates for excess electricity. The new net metering policy, known as NEM 3.0 will come into effect April 13th, 2023. Go solar now to be grandfathered into NEM 2.0 for the next 20 years.
Can I get incentives for solar battery storage?
Yes! The aforementioned incentives also apply to battery storage that is part of a commercial solar panel system. Not to mention, batteries have many advantages of their own and can save your business even more money in the long run.
Purchase a commercial solar installation from IE Construction.
For a business striving to improve its bottom line, solar offers a distinct advantage. Commercial solar is a vital step for commercial businesses looking for ways to save money in the long run. While taking steps such as investing in energy-efficient equipment can maximize your solar savings, tax rebates and incentives are the fastest way to recover a portion of your solar installation costs.
Looking for a commercial solar installation service to guide you through your solar energy project? Click the link below to contact us today and find out how IE Construction can help your business make the switch to solar energy.