Commercial Solar Energy Systems – Incentives and Credits

Now is a great time to install a solar energy system in your commercial building or business. The federal government and the state of Washington both offer a variety of tax credits and rebates that help make your solar energy system more affordable.

Federal Tax Credit

A commercial solar power system is even more affordable thanks to a tax incentive provided by the U.S. government. You can take a credit on your federal income tax for up to 30% of the installation cost of a commercial solar energy system. If you do not have enough tax liability to use the whole credit in one year, you can carry the balance forward up to 20 years in future years. This incentive applies to solar electric, as well as to solar hot water and wind power systems. This tax credit is only available to tax-paying entities. However, for publicly-owned buildings, the installing contractor may be able to take the credit and pass the savings on to you.

 

Federal Grants and Loans

As an alternative to a tax credit, federal grants are available for up to 30% of the installation cost of a solar electric system.

 

Block Grants for Indian Tribes

The Dept. of Energy has block grants available for Indian tribes to improve the energy efficiency of buildings on Native American land, including the installation of solar energy systems. Contact NW Wind & Solar or click here for more information. NW Wind & Solar works with local tribal leadership to develop training and employment opportunities during the life of the project and beyond.

Washington State Electricity Production Credit

The state of Washington, in partnership with local utilities, is offering varying levels of electricity production credits. For electricity produced by your solar energy electrical system, you can earn a minimum of $0.15/kWh for every kilowatt of electricity you produce. If the inverter you are using was manufactured in Washington State the rate is $.18/kWh; solar panels made in Washington earn $.36/kWh; and if both panels and inverter are made in Washington, you could earn $.54/kWh up to a maximum of $5,000/year. You may apply for this production credit every year through its expiration in 2020. Among the Washington utilities participating in this program are Seattle City Light and Puget Sound Energy, to name only two. Whenever possible, NW Wind & Solar will always install an inverter and solar panels made in Washington to maximize your production incentive. Click here for more information about Washington incentives for renewable energy.

 

Green Tag Purchases

The Northwest Solar Cooperative (NWSC) will purchase any electricity you produce from your solar energy system at the rate of $.02/kwH. NW Wind & Solar will assist you in applying for this production credit. For more information, click here to visit Solar Oregon.

 

Utility Company Incentives

Various utility companies in Washington offer credits and loan programs for solar energy system installations. For example, Snohomish PUD offers either a low interest loan (up to $25,000 at 2.9%) or a rebate of up to $2,500 for the installation of a solar energy system on your building. NW Wind & Solar will assist you in applying for these incentives. Click here to see a complete list of utilities offering credits and other incentives.

 

Net Metering

Your building will use the electricity generated by your solar panels and solar energy system before it uses electricity generated by your power company. If your solar energy system is generating more electricity than your business needs at the time, the electricity you are generating will go out into the electric grid to be used by someone else. When this happens, your electric meter will actually run backwards. During the summer, while your electricity use is low, you could actually have a credit on your electricity bill from your power company.

 

Washington State Sales Tax

You can receive a 100% rebate on any Washington State Sales and Use Tax paid for the installation of your solar energy system through June 30, 2013.

 

Accelerated depreciation

Modified Accelerated Cost Recovery System (MACRS) for Home-Based Businesses. Home-based businesses qualify for a full five-year MACRS accelerated depreciation tax deduction on the entire cost of the system. Check with your tax advisor for the applicability of this provision to your situation.