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Solar Energy
Incentives

State and federal government incentives are available for commercial renewable energy projects. These projects include solar panel installations, energy battery storage systems, and electric vehicle (EV) charging stations.

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Below are incentives that are part of federal programs. Some solar rebates and tax breaks are based on your business type and location.

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Get the most money possible from your renewable energy project. Find out how much you qualify for in commercial rebates. A solar expert can ensure that you take advantage of as many incentives as possible.

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A person with money in their hand

 Solar Renewable Energy Credits (RECs)
 

  • Solar panels generate electricity that is either sent back to your electric company’s grid or can be used internally to offset your electric bill.

  • When a solar energy system generates electricity, you receive a renewable energy credit.

  • These energy "credits” are then traded for cash from your electric company. 

  • Per Federal mandate, the utility company must have a certain percentage of renewable energy in their portfolio. They use the RECs to offset their mandate. 

  • The RECs are actual cash payments based on the amount of energy you create and can be paid to you for up to 20 years. (Timing is state specific)

  • These payments can significantly offset the cost of your system, or be used to generate incremental income.
     

The Federal Investment Tax Credit (ITC) 
 

  • This tax benefit was created to provide an incentive for businesses to pursue renewable energy sources.

  • The credit is currently equal to 30% of the gross project cost.  It can be increased to 50- 60% under certain circumstances.

  • Effective utilization of available incentive programs can dramatically reduce the upfront cost of the solar installation.

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The Rural Energy for America Program (REAP)
 

  • Through the Inflation Reduction Act (IRA), the Department of Agriculture (USDA) has received more than $1 billion in grant funds.

  • All agriculture producers as well as small businesses located in rural areas qualify to apply. 

  • The REAP funds are applied to energy efficient projects, including solar power installations.

  • Awarded grants cover up to 50% of the cost of a solar installation, and do not exceed $1 million.

  • Grants are awarded on a quarterly basis.

  • You can find out more details about the REAP program here.

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Modified Accelerated Cost Recovery System (MACRS) and Bonus Depreciation 
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  • 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.

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