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Incentives for Going Solar

There are many incentives available to businesses considering transitioning to solar energy; including tax credits, grants, and other financial incentives. One way a commercial building may qualify for these incentives is by installing solar panels on a new roof.

Incentives for businesses to install solar have been around for many years. The first federal solar incentives were contained in the Energy Policy Act of 2005, which provided a solar investment tax credit (ITC) for businesses that installed solar systems. This tax credit has been extended several times.

The federal government, for example, offers a tax credit for businesses that install solar panels on their property. This credit is equal to 30% of the cost of the solar installation in 2022. To qualify for this credit, the solar panels must be installed on a new or existing commercial building.

The Internal Revenue Service (IRS) has issued guidance regarding the treatment of costs related to the installation of solar panels on a commercial building, including the cost of the roof. Under Internal Revenue Code (IRC) section 48, businesses may be eligible for a tax credit for the installation of qualified solar energy property equal to 30% of the cost of the solar installation in 2021. To qualify for the above, solar panels must be installed on a new or existing commercial building.

The IRS has also issued guidance stating the cost of the roof where solar panels are installed CAN be included in the calculation of the tax credit, as long it is necessary and essential to the operation of the solar energy property and closely related to and primarily used for the solar energy property.

Additionally, many states and localities also offer their own incentives for businesses that install solar panels, such as grants, rebates, and other financial incentives. These incentives can vary by location and may have specific eligibility requirements, such as the type of business, the size of the solar installation, and the location of the building.

Who’s Gone Solar…So Far

There are many major businesses around the world that have made the transition to solar energy. Some include:

• Walmart: Walmart is one of the largest users of solar energy in the world, with over 2,000 solar installations at its stores and facilities. The company has committed to using 100% renewable energy by 2035, and has set a goal of installing solar panels on 60% of its buildings by the end of 2023.
• Apple: Apple has made a significant investment in solar energy, with over 1,000 solar projects in place at its facilities around the world. The company has a goal of becoming completely carbon-neutral by 2030, and is working to increase the use of renewable energy in its supply chain as well.
• Google: Google is one of the largest corporate purchasers of renewable energy in the world, with over 13,000 MW of renewable energy contracted. The company has a goal of becoming carbon-neutral by 2030, and is working to increase the use of solar energy in its operations.
• Amazon: Amazon has made a commitment to using 100% renewable energy by 2030, and has already installed over 1,600 solar projects at its facilities around the world. The company is also working to increase the use of renewable energy in its supply chain.

Now Is The Time

As the use of renewable energy becomes increasingly important, especially with the incentives and tax advantages still available, it is likely that more and more businesses will follow suit.

Businesses interested in transitioning to solar energy should learn the incentives available in their area and consult with a solar energy professional to determine their best course of action.