Federal, State and Utility Incentives
Act Now to Leverage Major Savings
- 30% tax credit that can be used to directly to offset your tax liability dollar for dollar.
- 2018 Federal Tax Reform Bill 100% Bonus Depreciation.
- Washington State Solar Production Incentive (up to $25,000 annually).
- USDA REAP Grant 25% of system cost Spring and Fall Deadlines.
Business Energy Investment Tax Credit (ITC)
Businesses that install solar photovoltaic (PV) systems are eligible to receive a tax credit in the amount of 30% of the total PV system cost. Unlike tax deductions, this tax credit can be used to directly offset your tax liability dollar for dollar. If your tax credit exceeds your tax liability you can roll the credit into future tax periods for 20 years.
In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The energy property must be operational in the year in which the credit is first taken.
Washington State Solar Production Incentive
The Washington State University extension energy program may issue a certification authorizing annual incentive payments up to the following annual dollar limits:
- For community solar projects, five thousand dollars per project participant.
- For commercial-scale systems, twenty-five thousand dollars.
- For shared commercial solar projects, up to thirty-five thousand dollars a year per participant.
Commercial Scale Projects:
- FY 2019: .04 kWh / .04 kWh WA Made Panel Bonus
- FY 2020: .02 kWh / .03 kWh WA Made Panel Bonus
- FY 2021: .02 kWh / .02 kWh WA Made Panel Bonus
Federal - 100% bonus depreciation
(2018, Tax Reform Bill)
The Tax Reform Bill modifies bonus depreciation under Code Section 168(k) to allow 100% expensing for property placed in service after September 27, 2017 and before January 1, 2023. By increasing bonus depreciation to 100 percent, the new tax bill essentially allows eligible entities to deduct the entire allowable tax basis of the system in the first year of operation. Under the federal Modified Cost Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. MACRS establishes a lifespan for various types of property over which the property may be depreciated. For PV systems, the taxable basis of the equipment must be reduced by 50% of any federal tax credits associated with the system.
PACE: Property Assessed Clean Energy Program (not Available in WA)
PACE makes it possible for owners of commercial, industrial, multifamily, and nonprofit properties to obtain low-cost, long-term financing for energy efficiency, water conservation, renewable energy projects, and more.
Your business or organization can obtain 100% financing for clean energy improvements from a local PACE program. Municipalities and counties work with private-sector lenders to provide this financing for qualified projects, such as solar panel installations, which is paid back through an annual assessment on the organization’s property tax bill.
The payback term may extend up to 20 years, which can save your business money by ensuring that yearly utility bill savings from your energy improvements are greater than your annual PACE payment. PACE programs for commercial properties are operating in 16 states.
USDA - Rural Energy for America Program (REAP) grant
The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses to purchase, install, and construct renewable energy systems. The 2014-2015 REAP grant solicitation states that to be eligible, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. The maximum grant amount is $500,000, for up to 25 percent of total project costs.
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I work as a client advocate for businesses interested in installing solar on their company-owned or long-term leased facilities. I focus on educating a business on the economic and environmental value that solar energy brings to the business. My service facilitates the initial stages of a solar project, from feasibility to choosing the right solar installer.
Solar Panel Efficiency and Average Sunlight are Known Data Points.
SOLAR POWER IMPROVES PROFITABILITY WITHOUT CHANGING A BUSINESS MODEL
Businesses that use 200,000 kWh+/year, own their own buildings or have a long term lease can realize:
- Lower and predictable utility operating costs.
Business Tax Credit, Accelerated MACRS Depreciation, State and Utility Incentives.
Reliable equipment with low maintenance costs.
Increased property value.
Solar panels demonstrate a commitment to the environment.
Solar power is a distributive power generation technology, distributive power is power generated at the point of consumption making it an excellent technology to reduce utility needs during peak hour electricity consumption.