Investing in a solar electric system is a key business decision and the return on your investment can be quite significant. There are number of federal and state programs that offer incentives, rebates and credits to qualifying businesses. At Sun-Wind Solutions, we want to make sure that you get all of the right information to help you make a qualified decision. We can show you how to take advantage of the various programs, incentives and financing options to fund your project and be cash-positive immediately and when you’re ready to move forward with your project, we’ll handle all the paperwork for you!
Commercial Solar Incentives
- Business Energy Investment Tax Credit (BEITC) – The full cost of your solar array; hardware and installation is eligible for a 30% federal renewable energy tax credit in year one.
- Accelerated Depreciation – 5 Year Property – You are allowed to depreciate the full cost of the system, less half of the value of the BEITC.
- ZRECs (Zero-emission Renewable Energy Credits) and On-Site Production and Consumption – Reduce your retail electricity purchases AND get paid for it. You create renewable energy (electricity) through a qualifying generator (your solar array). You then consume the energy that is produced by your array (reducing your demand for retail electricity purchases from your local utility company). Then you get paid a certain amount for each Z-REC you have created. One REC is equal to the production of one-thousand kilowatt hours of electricity. Simply put, Z-RECs are nothing more than a certificate, with a market value, that can be sold by you and purchased by various individuals or organizations that elect to purchase these certificates in lieu of creating their own actual zero-emission renewable energy.
- C-PACE (Connecticut – Property Assessed Clean Energy) – C-PACE allows building owners to finance solar energy projects through a voluntary assessment on their property tax bill. Property owners pay for the improvements over time through this additional charge on their property tax bill, and the repayment obligation transfers automatically to the next owner if the property is sold. Capital provided under the C-PACE program is secured by a lien on the property, so low-interest capital can be raised from the private sector.
Commercial Solar Financing Options Made Simple: The Facts and What’s Right for You
Solar panels naturally derate over their lifespan and our systems are guaranteed to perform to at least 80% of year one production in the 25th year after initial installation. Utility rates rise over time as well. The financial models and cash projections we develop for you take these factors into consideration by applying a 0.5% derating factor as well as a 3% average annual rate hike, both conservative. We never manipulate our factors to make our projections more attractive and we want you to have a thorough understanding of how our projections are developed before proceeding. We use “real” numbers and we deliver what we promise.
Here is a simple pros and cons guide to financing your project:
Best – Cash Financing
- Financing the system yourself gives you the greatest return on your investment (ROI). You are eligible for the full rebate and tax credit.
- ROI on a system that has “typical” site conditions is 8% or greater annually over the 25 year life of the system. And, because the ROI is treated as savings, not income, this ROI is tax-free.
- Very low risk with a very high yield.
Better – Bank Loan
- A loan will allow you to forgo coming up with the entire cost of the system at time of installation.
- You can still take full advantage of the full rebate and tax credit.
- The debt service (payments) for the loan years (the term) will most likely be higher than the standard utility-company-supplied cost of electricity that your array has now replaced. However, the full benefit kicks in at the completion of the loan term, where the system is entirely paid off and you are utilizing the generated electricity from the PV system with no associated cost. For example, if your loan term is 5 years, you will have “free” electricity from your system for 20 years (year 6–25).
- The 25 year average annual ROI is slightly lower than personally financing the project, but still very attractive.
Good – Leasing – or “Free Solar”
- You can reduce your electricity costs with no money down.
- We can install panels that are owned by a leasing agent, on your property, that you do not have to “pay” for (i.e., free”).
- Instead of paying the current “retail” electricity rate to your local utility company, you pay the leasing agent a reduced rate for electricity produced by the solar array(s).
- All incentives are taken by the leasing agent and factor into your “new” rate.
- The lifetime savings are much less than the scenarios above, but you still benefit from reduced electricity costs with no money down.
- Request an On-Site Solar Evaluation
- We’re here to answer all of your questions. A simple phone call is all it takes to get a preliminary assessment regarding the viability of a system at your site. If you like what you hear, we can then schedule a FREE, no-obligation detailed site assessment which will show expected system production as well as the financial benefits of investing in this project.