The facts about incentives and rebates when owning a solar system.
- Federal Tax Credit: The Investment Tax Credit (ITC) allows businesses to deduct 30% of the cost of a solar energy system from personal federal income taxes with no maximum limit. This applies those systems that are placed in service by Dec. 31, 2020. In December of 2015, the federal tax credit was extended and will remain at the 30% level until the end of 2019, but it will then ramp down incrementally through 2021 before remaining permanently at 10% thereafter.
- Depreciation:Take advantage of depreciation methods, including accelerated depreciation, based on the advice of your accountant.
- Property Tax Exemptions: In New York, the property tax code excludes 100% of the value of a solar energy system from your annual property taxes.
- New York State Energy Research Development Authority (NYSERDA) Incentives: The New York State Energy Research and Development Authority (NYSERDA) provides incentives for systems up to 2 megawatts in size. Currently, there are two incentive programs for commercial systems, under 200,000 watts, and greater than 200,000 watts, up to 2 megawatts.
- Connecticut Incentives: The Clean Energy Finance and Investment Authority (CEFIA) unveiled its new solar photovoltaics investment program. The ultimate goal of the program is to support 30 megawatts of solar photovoltaics (PV). There is $40 million allocated to the program for funding.
Choose your financing
The increasing popularity of commercial solar has created a rapidly growing market for financing. SolarPlus has the ability to provide unique financing solutions for your solar project to increase long term affordability and savings. Our best-in-class investor network enables us to select the ideal partner for every project to arrange attractive financing terms for your needs. Four main types are summarized below. To determine the right approach for you, contact us to speak to one of our commercial solar advisors.
- Pay for the installation up front, or obtain financing via a bank loan
- Allows you to take advantage of all federal and state tax credits/incentives that apply
- You may have sole responsibility for system maintenance
- States offer subsidized solar energy loans, and interest on secured loans may be tax deductible
- Small business and not-for-profit can obtain up to $100,000 at below market rates through New York States NYSERDA program
Property-Assessed Clean Energy (PACE)
- Authorized local governments (cities and counties) help property owners finance energy retrofits
- Allows the property owner to borrow money to pay for renewable energy improvements
- Loan is repaid over a period of years through a special assessment on the owner’s property
- Not available in all areas – click here to see if it is offered in your state and country
Power Purchase Agreement (PPA)
- Financing agreement between a developer and business customer where a third party owns and operates the system
- Developer arranges for the design, installation and maintenance of a solar energy system
- Business customer pays an agreed rate per kWh to the developer, often with no upfront or other costs
- These agreements are simple for property owners and reduce energy bills
- Developer passes on solar tax credit savings in the form of a lower PPA rate
Not For Profit PPA
- A nonprofit or tax-exempt entity enters into a Special Purpose Vehicle (SPV) with a PPA provider
- PPA provider handles financing, designing, installing, and owning the system
- The investor group provides debt and equity financing, and receives tax incentives and rebates
- The nonprofit buys the electricity through the SPV just as it now pays the utility company, at a discounted rate
Capital Lease (For Profit Companies)
- Typically comes with low upfront costs
- Allows you to lock in a low, consistent monthly payments
- Entitles the business to the 30% federal and state tax credits/incentives
- Typical terms are 5 – 7 years, and provides you with a path to full system ownership
Operating Lease (For Profit Companies)
- Similar to a rental agreement, this vehicle provides off balance sheet financing
- Investor group is entitled to depreciation and federal tax credits
- Business receives lower interest rate for the tax benefits received by investor group
- Option similar to PPA, but has flexible terms, and includes a fair market purchase at the end of the lease term
Not-For-Profit and Municipal Leases
- Lease available to well-established, creditworthy non-profit organizations
- Benefits municipalities, churches, schools, and 501(c)3 structured entities that desire to leverage state utility rebates for solar
Selecting SolarPlus as your qualified solar expert, we will work with you to ensure energy savings, predictable energy costs, and guaranteed energy production. Contact us today and speak with one of our solar experts to learn more about your financing options. Call us today at (877) 523-5223 or contact us for your free on-site evaluation.