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Incentives

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A Collection Of Federal Tax
Benefits & State Rebates

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Making an investment in renewable energy can involve high up-front solar costs, and while solar financing options bring the costs of solar down, incentives are another great way to make solar affordable for the average building owner. Though many state and federal incentives have limited availability, the following is a summary of the various solar incentives currently on offer.

Federal Solar Tax Credits for Commercial Solar

Currently there are a number of different federal incentives that, when combined, can cover up to 55% of the cost of a new solar system. When coupled with incentives offered by states, the cost of a solar installation may be even lower.

Federal Investment Tax Credit (ITC):

This option gives businesses the option of offsetting their income taxes with a tax credit for 30% of the purchase of a solar power system under US Code Title 26 (Section 48(a)(3)), with no value cap. The 30% ITC tax credit was extended for solar projects up until December 31, 2016 and can be used for regular and alternative minimum tax (AMT).

Accelerated Depreciation:

Through the Modified Accelerated Cost-Recovery System (MACRS) offered by the federal government, businesses can recover additional solar investment costs. Currently, businesses that go solar qualify 50% bonus depreciation. This means that the business can recover the cost earlier than it would under straight-line depreciation.


California Solar Incentives for Commercial Solar:

California has some of the most generous tax incentives in the country, making a solar installation much more attractive to building owners than ever before. Perhaps most noteworthy are the incentives offered through local utility companies as part of the California Solar Initiative (CSI). The CSI’s objective is to install 3,000 megawatts of solar capacity on roofs throughout the state. To that end CSI offers small and medium sized solar systems an Expected Performance-Based Buydown (EPBB) on a per-watt rebate basis for systems 50 kW or smaller. This means that as the state’s total solar capacity increases, the incentive amounts decrease.