INCENTIVES FOR INSTALLING SOLAR ARE AVAILABLE THROUGH UTILITY SAVINGS, VARIOUS GRANTS, ZREC AGREEMENTS WITH YOUR UTILITY COMPANY, MACRS BONUS DEPRECIATION AND FEDERAL TAX CREDITS.
Some types of business will qualify for grants when installing solar. We have helped businesses receive grants ranging from $18,000 to over $100,000 in value to offset system cost.
ZRECs: or Zero Renewable Energy Credits
Solar panels generate energy that is sent back to your utility company’s grid. These energy “credits” that are generated can be traded for cash paid back to you from your utility company. Your utility company uses these credits to offset their federal mandate to have a certain percentage of the energy in their portfolio as renewable. These are actual cash payments paid out to you for 15 years and are based on the amount of energy you create. These payments can significantly offset the cost of your system.
The Federal Investment Tax Credit (ITC)
This tax benefit was created to provide incentive for businesses to pursue renewable energy sources. This tax credit is currently equal to 30% of the gross project cost. This will phase down to 25%, 22% and finally to 10% over the next 4 years, respectively. Effective utilization of available incentive programs can dramatically reduce the upfront cost of solar while providing a predictable long-term revenue stream.
MACRS or Modified Accelerated Cost Recovery System and Bonus Depreciation
New depreciation laws for renewable projects allow businesses to write off 100% of the cost of a solar system in the first year or spread over six years. Normally a system with 25+yr lifespan would be depreciated slowly over 25 years. The Bonus part of this benefit is that you are allowed to depreciate 85% of your project rather than the typical 70%. This extra bonus is unique to renewable projects.
Many businesses are able to pass these tax benefits through to their personal taxes depending on how the company is structured. We recommend you discuss this option with your tax accountant.