Solar Power for Business
Increasingly, business owners are finding that going solar is not just a good move for the environment, but also a good move for their bottom line. Solar power can be installed in a variety of configurations to meet your business’s needs, and using the solar energy that is generated will save you money.
Solar Means Business
Making use of solar energy is a smart strategy for any business. By installing PV you can essentially lock in a low electricity rate for years to come, with a very favorable return on your investment. Commercial PV installation is not limited to corporate giants; installation prices have dropped by over 50% since 2012, and small businesses can easily attain PV installations that create significant savings.
Furthermore, it is a great opportunity, here at the beginning of our country’s transition to renewable energy, to distinguish your business from others by leading in sustainability. By investing well for your company, you will also be investing in the well-being of future generations, and many Americans today are interested supporting businesses that give back. Going solar makes a powerful statement that your business’s success is in harmony with our environment.
How Solar Works For You
Solar PV allows your business to generate clean electricity on its rooftop (or land) at a very predictable cost-per-kilowatt-hour that is generally less than currently paid to the utility. When the sun is out, the panels make power. When the sun goes down, your business consumes electricity from the grid. Grid consumption versus production is reconciled monthly and credits carry forward up to a year.
The cornerstone of grid-tied solar photovoltaic systems is the policy of net metering, where the utility is mandated by state law to purchase electricity generated by the business and to offer compensation (in the form of a credit) on future electric bills. There are limits to the size of a system which is net-metered, which varies state-by-state, though practical considerations (like how much solar fits on your roof) usually come up before state limits are reached.
30% Investment Tax Credit
The 30% ITC is the most significant tax credit available for solar energy systems, both solar hot water and solar photovoltaic. A business may take a credit (not deduction) of 30% of the purchase price of a solar energy system against an existing income or AMT tax liability.
More information: http://programs.dsireusa.org/system/program/detail/1837
MACRS (5 Year Accelerated Depreciation)
Solar energy systems may be eligible for five year accelerated depreciation if claimed as business property under the federal Modified Accelerated Cost-Recovery System (MACRS). Businesses eligible to use this deduction typically see an additional savings of 20-26%.
More information: http://programs.dsireusa.org/system/program/detail/676
USDA REAP Grants
The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance.
These competitive grants are offered as much as twice per year and are available to businesses that meet the USDA’s definition of rural (under 50,000 inhabitants), while agricultural producers may be in rural or non-rural areas. ReVision Energy is able to offer some support in the grant-writing process on a case-by-case basis. A USDA REAP grant may provide up to 25% of a project’s cost, with a cap of $500,000.
Solar Renewable Energy Credits (SRECs)
Solar Renewable Energy Certificates (SRECs) or Solar Renewable Energy Credits are a form of Renewable Energy Certificate that are specifically met by solar generation assets. Every 1MWh of solar generation generates 1 credit, which has a market value which fluctuates based on demand. These credits can be sold to utilities so that they can meet their requirements under an individual states’ Renewable Portfolio Standard (RPS) legislation. SREC value varies widely state-by-state based on size of the solar market and aggressiveness of solar goals under the state’s RPS.