Solar Incentives
There are a number of solar tax credits and incentives being offered on the federal and state levels to help business owners make the installation of a solar electric system more affordable. In most cases, businesses are able to pay off their entire solar power system within 5 years.
Grants and Tax Incentives
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Federal Investment Tax Credit - Stimulus Grant
Businesses that install grid-connected solar systems qualify for solar tax credits amounting to almost a third of the net purchase price. Under the current Stimulus Bill, the federal government is awarding a cash grant in lieu of the Investment Tax Credit (ITC) equaling 30% of the installation cost - paid to the solar system owner within 60 days after installation.
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Depreciation (MACRS) Updated for 2011
In 2011, businesses are able to write-off their entire investment in a solar electric system without having to depreciate it over a number of years. Typically, the tax benefit from this write-off is about 30% of the total system cost. (This is on top of the 30% ITC grant mentioned above.) After 2011, depreciation of solar assets will revert to a 5-year asset life MACRS schedule.
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Sales of Solar Renewable Energy Certificates (SRECs)
These are awarded by each state to producers of renewable energy. The monetary value and amount of certificates generated varies by state. The annual sale of SRECs helps to amortize the cost of the solar system and contributes to business revenue once it's paid off (typically within 5 years). Learn more about SRECs.
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Energy Savings
From its date of installation, a solar electric system will reliably produce electricity during daylight hours for more than thirty years. As the cost of utility supplied electricity inflates, the actual energy savings from the solar system will also increase.