Commercial solar incentives like the 30% federal solar tax credit make solar panels a no-brainer for businesses of all sizes. With the tax credit and other incentives, you can significantly reduce your upfront costs, leading to a faster payback period and better ROI.
Solar Energy Solutions is the leading commercial solar installation company serving Indiana, Kentucky, Illinois, Virginia, and Ohio. We can help you get the most out of your investment in commercial solar incentives by ensuring you qualify for as many commercial solar tax credits and rebates as possible.
Keep reading for a list of the best commercial solar incentives in 2024 to get a head start on savings.
Federal Solar Tax Credits for Businesses
There are two federal tax credits commercial businesses and nonprofit organizations can claim when they install solar panels. In most cases, you can only claim one or the other for your commercial solar project, not both.
Investment Tax Credit
The investment tax credit (ITC) is the most popular solar incentive for businesses. The ITC is a tax credit that reduces your federal income tax liability by a percentage of your commercial solar installation costs—30% in 2024.
Production Tax Credit for Businesses
The production tax credit (PTC) is based on the amount of electricity your commercial solar system produces during the first 10 years of operation. You will receive a base credit per kWh of electricity generated, and your rate will be adjusted annually to account for inflation.
Most commercial solar projects opt for the ITC because it is an upfront incentive with a guaranteed amount. Projects that are located in very sunny areas with high projected outputs, however, may benefit more from the PTC. Solar Energy Solutions can help you weigh the pros and cons of each business solar tax credit and help you make the best choice for your project. We also always recommend consulting with a tax professional before making a decision.
MACRS Depreciation for Commercial Solar Panels
Commercial solar energy systems are eligible for Modified Accelerated Cost Recovery System (MACRS) depreciation, which allows the cost of an asset to be recovered over a specified period of time through annual tax deductions. Qualifying commercial solar energy equipment is eligible for a 5-year cost recovery period.
USDA REAP Grants for Commercial Solar Energy Systems
The Rural Energy for America Program (REAP) offers guaranteed loan financing and grant funding to agricultural producers and rural small businesses that install solar energy systems. Qualifying businesses can receive the following:
- A loan guarantee on loans up to 75% of total eligible project costs
- Grants for up to 50% of total eligible project costs
- Combined grant and loan guarantee funding up to 75% of total eligible project costs
REAP grants can be combined with the federal solar tax credit, reducing your solar installation costs by 80 percent!
Solar Energy Solutions specializes in solar panel installation for agricultural businesses. We can help you take advantage of REAP grant funding for your agricultural solar project. Learn more about agricultural solar financing and incentives.
Commercial Solar Incentives for Non-Profits
Non-profit organizations have been historically excluded from commercial solar incentives since most are tax-based. The Inflation Reduction Act of 2022 changed that by introducing a new solar incentive for non-profit organizations like schools, churches, and governments.
Non-profit organizations are eligible for a direct payment worth 30% of their solar installation costs in lieu of the investment tax credit for solar panels.
Transfer of Credit
Organizations that are not eligible for direct pay may choose to sell some or all of their tax credit to an unrelated, eligible taxpayer.
Learn More About Commercial Solar Installation for Your Business
Solar Energy Solutions is a locally owned, family business that is committed to helping other businesses go solar. We know how much businesses and non-profits stand to benefit from solar energy and we want to help you make the switch so you can stop outsourcing electricity production to the electric grid. We’ve installed thousands of solar energy systems and are the most experienced commercial solar installers in the area.