Federal Investment Tax Credit (ITC): Whether you’re a business owner or homeowner, the federal tax credit is the most significant financial incentive for all solar shoppers. At least until , the ITC provides a tax credit equal to 30% of the upfront cost of solar for businesses. It’s a credit, not a deduction, meaning if your project costs $100,000, the ITC reduces the amount you owe the federal government in taxes by $30,000. If your system includes U.S.-manufactured equipment, is located in an energy community, is located in a low-income community or tribal land, or is installed as part of a low-income residential building project or economic benefit system, you may also qualify for additional tax credits on top of the 30%!
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Production Tax Credit (PTC): Instead of receiving the ITC, you can choose to get tax credits based on the amount of electricity your system produces (on a dollar per kilowatt-hour, $/kWh basis) through the PTC. If your project produces a lot of electricity and is relatively inexpensive to build, you may save more with the PTC than the ITC.
Modified Accelerated Cost Recovery System (MACRS): MACRS is a depreciation benefit that allows you to lower your taxable earnings and recover the depreciated value of your solar installation over five years. When you combine MACRS with the solar tax credit, you can earn tax incentives worth about 70% of your system’s cost.
Bonus depreciation: Bonus depreciation is similar to MACRS, but you take the full depreciation benefit in the first year of your investment instead of over five years. You have to choose between MACRS and bonus depreciation.
Net metering: Some states and utility companies offer an incentive called net metering that can significantly increase your solar savings over time. Under net metering, your utility company provides you with credits for the excess electricity your system generates and sends to the grid. When you need to pull electricity from the grid instead of your system, it counts against the credits you bank over time. At the end of your billing cycle, your utility company only bills you for your “net” electricity consumption.
As we approach , the integration of solar panels in commercial projects is no longer just an option but a strategic necessity. This blogpost delves into how solar energy works and the multifaceted benefits it brings to commercial buildings. Solar panels have been used on residential buildings for many years, but it’s only recently that they’re becoming more common in commercial construction.
Solar energy is a cost-effective, dependable, eco-friendly way to power a business. It can power lighting, heating, air conditioning and water heating in commercial buildings. The panels can be installed on rooftops, parking lots and side yards.
In this article we discuss how solar panels work and the benefits of using solar energy in commercial buildings.
Electricity costs in the U.S. are increasing, making it more expensive for businesses to operate and more challenging to plan ahead. Meanwhile, solar panel prices have dropped significantly in recent years as the technology and production processes have improved.
The U.S. Energy Information Administration expects electric generation from solar to be the leading source of growth in the U.S. power sector through the end of , with 79 GW of new solar capacity projected to come online over the next two years.
In the EIA’s Short-Term Energy Outlook, the agency said it expects renewable energy’s overall share of electricity generation to rise to 26% by the end of .
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Sunlight is captured and converted into usable energy through different methods, some more efficient than others. Today, solar panels can convert 20% of the sunlight they capture into solar energy, making it a more viable source of power for commercial buildings.
A solar panel, also known as a solar module, consists of silicon cell layers, a glass casing unit, a metal frame and wiring to transfer electric current from silicon. Silicon has conductive properties that absorb and convert sunlight into usable electrical power. The sunlight causes the silicon cell electrons to set in motion, creating an electric current.
One of the challenges of using solar energy is how to store more of it to produce more power from it.
There are several ways to store solar energy:
When solar energy is fed into an electrochemical battery, the chemical reaction on the battery components keeps the solar energy. In a reverse reaction, the current exits from the battery storage for consumption.
Thermal storage uses mediums such as molten salt or water to retain and absorb the heat from the sun. The heated mediums are then stored in an insulated tank until the stored energy is needed for consumption.
Contact us to discuss your requirements of Commercial Solar PV System. Our experienced sales team can help you identify the options that best suit your needs.
Mechanical storage converts the surplus electric power to mechanical power, then converts it back into electricity for later consumption.
There are three primary types of mechanical energy storage systems:
This method uses surplus electricity to spin a flywheel, generating electricity during peak demand times.
Water is pumped to a reservoir using surplus energy from solar panels and sent upstream of the turbine generators. Then water is allowed to flow through the turbines to generate electricity.
This system stores compressed air in large vessels such as tanks or natural formations (e.g., caves), then releases the air to generate electricity.
Electricity is one of the biggest ongoing expenses that commercial buildings have. Solar panels significantly reduce energy costs. While the initial investment can be high, overtime the cost of installing solar panels is recouped by the money saved on electricity bills.
Energy efficiency is tremendously popular these days. Installing solar panels can increase the value of commercial buildings and help them sell faster.
There are two tax federal credits available for businesses, nonprofits and local and tribal governments that purchase solar energy systems:
Solar systems that are placed in service in or later and begin construction before are eligible for a 30% ITC or a 2.6 ¢/kWh PTC if they meet labor requirements issued by the Treasury Department or are under 1 megawatt (MW) in size.
Generally, project owners cannot claim both the ITC and the PTC for the same property, although they could claim different credits for co-located systems, like solar and storage.
In addition to these tax credits, the Tax Cut and Jobs Act of offers the option of a 100% bonus depreciation on solar systems. Furthermore, some states and utility companies offer additional tax credits or rebates for commercial solar systems.
Solar energy is a renewable resource that does not produce greenhouse emissions; therefore, using solar energy helps the environment by reducing reliance on fossil fuels.
Consumer demand for environmentally friendly products and services has increased in recent years. By installing solar panels, a brand shows that it cares about the environment and is making an effort to reduce its carbon footprint.
Buildings that rely entirely on electric grids are vulnerable to power outages that occur during bad weather or electrical system malfunctions. Solar panels installed with battery systems allow commercial buildings to continue to function during power outages.
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Solar panels require very little maintenance throughout their lifespan–a wash every once in a while, depending on where you live and how much debris accumulates on the panels. They have no moving parts, so they’re not likely to break down. Made of tempered glass and non-corrosive aluminum frames, solar panels can withstand rain, wind, hail and snow. The photovoltaic cells are designed to last 25 years or more.
The advantages of using solar panels to power commercial buildings are likely to multiply as solar energy technology continues to develop. Rather than being an afterthought, solar panels should be considered during the design and construction phase of commercial projects.
For more information, please visit Commercial Solar Panel.