To stimulate investment in solar power, large corporations like McDonald’s, PepsiCo, Trane, WeWork, and Levi Strauss recently sent a letter to Congress. These business leaders are looking for ways to reduce their energy costs while minimizing their carbon footprints.
But you don’t need to be a billion-dollar corporation to lower your energy bills by investing in a solar photovoltaic (PV) system. If you own a commercial premises like a supermarket, warehouse, or light industrial building with a large roof or a parking lot, installing solar panels on your property can increase the value of your business.
Apply Tax Incentives for Your Solar Installation
Purchasing a solar photovoltaic system is a good option if your energy demands are high and you want to invest in a supply of long-term renewable energy.
By purchasing and installing solar equipment, you can take advantage of generous tax incentives, like the federal solar investment tax credit:
- For 2021 and 2022, owners of commercial solar can reduce their tax liability by 26 percent of the cost of the system.
- In 2023, they will be able to reduce their tax liability by 22 percent of the cost of the system.
- In 2024, they will be able to reduce their tax liability by 10 percent of the cost of the system.
As long as you own your commercial solar energy system, you are eligible to claim the investment tax credit. Even if you don’t have enough tax liability in one year to claim the entire credit, you may be able to roll over the remaining credits into future years for as long as the tax credit is in effect.
You may also be able to sell any extra energy you generate from your project, creating a consistent income stream for the life of your project.
Benefits to installing a solar PV project include:
- Control over growing utility costs
- Income stream from selling surplus energy to utilities
- Generous tax incentives
Help Your Community by Leasing Your Rooftop
If your roof meets the needed specifications, you might be able to lease out the space for a community solar project.
Community solar, also known as shared solar or solar gardens, is any solar project or purchasing program, within a geographic area, that shares the benefits of the project among a range of consumers, including individuals, businesses, non-profits, and other groups.
These projects use a subscription model, providing electricity bill discounts to any participating company, resident, non-profit, or government organization. Your company can sign up for your own rooftop solar project to reduce your monthly energy bills, or the project can be opened to local businesses and households.
Benefits to leasing your rooftop for community solar include:
- No capital expenditures
- Passive income stream
- Tax incentives
- Lower electricity bills if you subscribe
Partner with a Solar Developer in a PPA
Another option for creating business value is to enter a power purchase agreement (PPA) with a solar developer. A PPA is a financial agreement with a developer who will design, permit, finance, and install a solar PV system on your property or other site with no capital outlays needed from you. PPAs normally range from 10 to 25 years.
The developer sells the generated solar power to you at an agreed rate per kilowatt hour that is competitive with your local utility. The developer takes advantage of the tax credits and passes the savings onto you.
Benefits of participating in a PPA include:
- No capital expenditures
- Lower electricity bills
- Reduced risk
- A hedge against future utility rate hikes
Questions to Consider
- Is my property suitable for solar?
- I own multiple commercial properties. Which option would give me the best business value?
- What are my options for financing my own project?
- What are the benefits of leasing my rooftop for solar versus installing my own system?
Consultants from BAI Group are available to assess the suitability of your roof or parking lot for a solar installation. If your roof requires repair or replacement, this may be the right time to install a solar array.
To finance your project, we can identify local, state, and federal incentives like tax credits and grants that can help reduce the costs of building your project.
There are many things to consider when thinking about solar power installations. We can help you make sense of the entire picture.
To learn if solar is the right move for your organization, contact us for a free solar feasibility report.