How Commercial Solar Incentives Speed Up ROI
Several of the world’s most successful businesses are switching to solar energy in order to decrease expenses, and radically improve their yearly finances. For companies like Walmart, Target and PepsiCo, it’s now more a matter of how much and how quickly they can save money with solar, no longer an “If”.
Despite the growing popularity of solar energy, the majority of small and medium-sized business owners still don’t know about the various helpful incentive programs available that can exponentially reduce the costs of setting up their own solar energy system.
In the next paragraph you can read further about the most utilized commercial solar incentives. So keep on reading, and learn how you can offset as much as 50% of a solar system purchase. Turning sunshine into saving money is more affordable and easier than you could imagine!
26% Solar Investment Tax Credit (ITC)
This incentive, available to businesses and homeowners alike, will offset up to 26% of a solar system purchase in the form of a federal incentive tax credit. In order to qualify, the company must have a tax liability upon filing. That means that if the business owner is going to receive money from their tax return, the credit will not be applied for that year, and will simply roll forward. The 26% ITC is only available in 2020; from 2021 it will drop to 22% and in 2022, it will decrease to a further, permanent 10% for commercial projects and 0% for residential projects.
MACRS Investment Depreciation
Every commercial solar system qualifies for the Modified Accelerated Cost Recovery System (MACRS). Set up back in 1986, it is a method of depreciation in which a business’ investments are recovered, for tax purposes, over a specific period of time via annual deductions. The solar systems that qualify for this are then eligible for a cost recovery period of up to five years.
USDA REAP Grants
The Rural Energy for America Program (REAP) grant was established by the USDA to help agricultural producers investing in renewable energy. This REAP grant is only available in certain rural towns across the country whose population is below a certain threshold. This grant also covers 25% of a solar investment up to $500,000 for businesses that qualify.
As you can see, this is the right time for businesses to take advantage of the incentives above and start offsetting the rising cost of energy by installing their own solar energy system. Additionally, the list above is highlighting only a small amount of the wide options available at federal and state levels. There are also some local utilities that still offer their own incentive programs, which means that if added to the options above you can save even more! Ultimately, no one knows how long these incentive programs will last. Even the federal 30% ITC credit already is expiring.
Contact us today for a free of charge solar energy quote and to find out about further convenient programs in your area.