Commercial Solar Incentives Georgia: Incentives & Rebates 2024

Key Georgia Commercial Solar Incentives & Rebates

The various commercial solar incentives Georgia offers can save you up to 80% upfront cost of setting up a solar system. While the state offers fewer local solar incentives for commercial customers than most states, you can still stack up various federal and local incentives available in Georgia to achieve a huge discount on a solar investment. Here we cover the most important commercial solar incentives and rebates available to businesses in the state.

Commercial Federal Investment Tax Credit (ITC)

The Investment Tax Credit (ITC) is a federal tax incentive that allows businesses and nonprofits to claim a percentage of the cost of installing eligible renewable energy systems, such as solar, against their federal income taxes. This incentive extends a lucrative 30% tax credit applicable to the entire expenditure incurred on certified renewable energy acquisitions, with no upper cap imposed. Any excess credits can either be applied backward for a year or carried forward for up to two decades. Permissible technologies include solar, climate control in buildings and the provision of solar-derived heat for industrial processes.

Key aspect of the ITC

Projects that commence construction before January 31, 2023, must meet labor requirements set by the Treasury Department to qualify for the full ITC. There are penalties for non-compliance or if a good faith effort is not made to meet the requirements.

Modified Accelerated Cost-Recovery Systems (MACRS)

MACRS was established in 1986 as a method of depreciation in which a business’ investments in certain tangible property such as solar systems in this case are recovered, for tax purposes, over a specified time period through annual deductions. This allows businesses to write off the cost of solar assets over a shorter period than the actual lifespan, usually 5 years according to the IRS depreciation property document.

The amount of depreciation depends on the business’s effective tax rate. For instance, consider a $150,000 solar system. If the business is taxed at 25%, the bonus depreciation effect is $37,500, resulting in reduced taxes paid. However, for a business taxed at 40%, the impact rises to $60,000 less taxes paid. Thus, based on the effective tax rate, this incentive could potentially slash the system cost by an extra 25-40% in the initial year. This is a lucrative commercial solar incentive Georgia-based businesses can take advantage of today.

Commercial Production Tax Credit (PTC)

Originally enacted in 1992, The Production Tax Credit (PTC) has undergone several positive expansions over the last 3 decades. The program stands as a key federal incentive for commercial solar projects in Georgia. Unlike the Investment Tax Credit (ITC), which grants a one-time credit tied to installation costs, the PTC operates on a per kilowatt-hour (kWh) basis. This means that for every kilowatt-hour of electricity generated by solar and other eligible renewable technologies, a tax credit is provided. This credit is calculated based on the amount of electricity produced over the initial ten years of the system’s operation. So, the more electricity the system generates, the greater the tax credit the system owner can claim. The PTC dynamically reduces the federal income tax liability of the system’s owner, adjusting annually for inflation to maintain its economic relevance amidst changing financial landscapes.

30% Federal Direct Pay Reimbursement for Non-Profit

The Direct pay reimbursement offers counties a streamlined way to benefit from the clean energy tax incentives outlined in the IRA. Through the Inflation Reduction Act (IRA), Instead of receiving a tax credit, counties, and non-profits can now apply for and receive a refund equivalent to the value of the credit they would have received. This option empowers entities such as local governments, public utilities, and entities such as rural electric cooperatives to embark on renewable energy projects independently, without relying on external financing.

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Net Metering in Georgia 2024

Net metering allows customers with solar panels to offset their electricity bills by selling excess energy back to the utility company. Initially, Georgia Power introduced Temporary Net Metering as mandated by the state, which reached its maximum capacity by July 2021. This program was established following directives from the Georgia Public Service Commission’s 2019 rate case, which required net metering for up to 5,000 rooftop solar customers or 32 MW of capacity. This threshold remained unchanged in the subsequent 2022 rate case.

Under net metering, any extra electricity generated by solar panels beyond what the customer uses is credited to their account at a rate set by the utility company, known as the solar avoided cost rate. Once the net metering threshold is met, Georgia Power transitions to net billing. This means that customers continue to receive credits for excess electricity, but any surplus generation is credited against their future electricity bills at a predetermined rate established by the Georgia Public Service Commission.

Additionally, Georgia’s HB 57 legislation allows for collaboration with third-party companies for the installation, operation, leasing, and financing of solar panel systems. For commercial installations, there is a limit on the size of the system, set at 125% of peak demand. It’s important to note that while larger systems above 100 kW are not explicitly prohibited, they may require adherence to additional regulatory requirements related to safety, power quality, and interconnection standards.

How to enroll in net metering in Georgia

Each utility company in Georgia offers its own unique net metering enrollment policy. However, Georgia requires all net metering customers to use solar inverters capable of synchronizing with the power grid, compliant with UL 1741 and IEEE 1547 standards no matter the utility company. Here is how to set up net metering for the following utilities:

• Central Georgia EMC
• Cobb EMC
• Flint Energies
• Georgia Power
• Jackson EMC
• Sawnee EMC

Additional Local Commercial Solar Incentives Georgia: Incentives and Rebates

Georgia ranked 7th highest in the US for cumulative solar capacity in 2023, one step below their 6th position in 2022. As a state with a solar investment worth $6.1 billion, the Peach State offers additional local commercial solar incentives Georgia-based businesses can take advantage of in 2024.

USDA REAP Grant

The USDA Rural Energy for America Program (REAP) Grant is a financial assistance program for Agro and local businesses that was first passed by Congress in the 2002 Farm Bill. Over the years the USDA program has provided almost $360 million in grants and $430 million in loan guarantees to agricultural producers and rural small business owners to adopt clean energy solutions.

The USDA REAP Grant covers up to 50% of your total solar project cost, with a maximum grant amount of $1 million. Awards are distributed quarterly, making it essential for prospective applicants to initiate the application process well in advance due to the necessary time investment. Remarkably, eligibility determinations for the grant can be completed in just five minutes, streamlining the application procedure for interested parties.

Georgia Power – Commercial Energy Efficiency Rebate Program

Georgia Power, one of the largest utility companies serving over 2.5 million customers offers one of the best local commercial solar incentives Georgia businesses have been enjoying for years. To participate, businesses must obtain pre-approval for their projects, and detailed program information is available on the official website.

In addition, Georgia Power’s Small Commercial Direct Install Program targets small commercial customers. Under this program, Georgia Power conducts a complimentary lighting assessment and covers up to 70% of the costs for energy-efficiency upgrades for participating clients. Small commercial customers with an annual peak demand of 120 kW or less are eligible for this program.