How to Save on Solar with Tax Credits

It is well known at this point that America is transitioning to cleaner, renewable energy. BW Research Partnership predicts that by 2030 we could 50-70% of our energy coming from sources like solar or wind. Many companies or community decision-makers consider solar but can sometimes quit as soon as they start because navigating the jungle of switching to solar can be daunting – this article aims to help make that process a little bit easier. 

Before you get started on your journey to switching to solar, you should find out how much energy your company is consuming each year. Many commercial-level solar companies aim for ground mount jobs ranging from 1 megawatt (MW) to 50 MW. To make the purchase easier, your company could consider entering power purchase agreements (PPA) or virtual power purchase agreements (VPPA) with other interested parties.  

Three Quick Benefits to KNOWING About Switching to Solar. 

  • Solar saves money – by producing onsite solar energy, companies can cut down on utility bills and save during peak hours of the day. If a battery is installed along with the panels, your company can store extra energy that is not used during the day and use it during the night. 
  • Solar can reduce carbon footprints – Companies that use solar leave less of a carbon footprint which is good for the environment, people, and marketing. If your company ends up selling back unused energy to the grid, everyone else will benefit from your good environmentally conscious decision. 
  • Solar has many tax benefits – Investing in solar can come with many monetary benefits from public entities, you see them in tax credits and incentive programs offered by state and local governments.  

What tax credits are available for solar? 

Tax credits are a limited benefit passed by congress and currently sit at 26%. In 2020, congress passed a two-year phase down; 2021-22 will stay at 26%, then 22% in 2023, and finally 10% in 2024. In short, the sooner you get solar, the more you can expect to save! 

Many other benefits come with switching to solar, such as using the Modified Accelerated Cost Recovery System (MACRS). Many websites have complete lists of state and local incentives, for example, DSIRE shows that the state of Minnesota has 134 policies and incentives offered. Clicking on each offer gives more details. 

Another thing to consider is that eco-friendly businesses tend to attract more customers3. Many surveys show that customers like knowing that their dollars are going towards groups and companies who are consciously making efforts to become more eco-friendly anddifferent alliances across the United States certify businesses who are making those efforts, US Solar is one example. 

What will a solar system cost?  

Every company’s needs are unique to their specific situation which makes it hard to give customers an easy-to-read graph to know costs before a consultation. Before talking with a solar contractor about the cost of installation, ask yourself how much energy does my business use annually, and do I have the necessary space for installation? Knowing these things will help streamline the process when speaking to a professional. 

With that in mind, here is a rough idea of what you can expect. One megawatt of ground mounts (common size for business/solar farms) will take up about eight acres and can cost anywhere between 1-1.5 million dollars1. Panels tend to last about 30 years and will have a payback period of three to five years2 

To sum that up, your company needs a minimum of eight acres to achieve one megawatt of power. By installing solar you are investing in your company, you may not see the benefits of that investment for a few years. Solar panels do not last forever, eventually, your company will need to replace them. 

Are all Panels Created Equally? 

Manufacturer A’s panel will produce a different amount of electricity than Manufacturer B’s. Each manufacturer’s panels use a different combination of minerals, chemicals, glass, solar cell arrangement, etc. A seasoned professional will help you pick the right panel for your configuration so that your business is getting the most bang for its buck. 

Is solar energy storable? 

While shopping for solar, take into consideration battery storage. With a solar-plus-battery system you are ensuring reliable backup power that works to eliminate or reduce demand charges (did you know that 30-70% of industrial utility bills may consist of demand charges?). This also allows for companies to utilize solar energy even after the sun has set, further helping to meet the corporate sustainability goal! 

Can we make money off our solar panels? 

Often different energy companies will offer a buyback program in which they will purchase a company’s unused energy. This can be done multiple ways; either by selling from the battery or connecting right into the grid. Contact your local utility provider to further understand what they offer.  

Another way to make money off your solar energy is by selling it to a neighboring business. This can be a great way for another company to meet its sustainability goals as well, but contracts could get a bit difficult to navigate so make sure your company is up for the challenge. 

Selling some of the Solar energy that you produce will help shorten that payback period, so consider this avenue! 

Get ahead! 

The future is going to be even more eco-friendly than ever before, get ahead of competitors by considering the installation of solar panels now. Many companies, like Knobelsdorff, are one-stop-shops for navigating cost, construction, and permits – with the ability to also install battery storage and EV car charging stations. 

Solar energy is a booming industry and has many positive upsides both in the immediate and the long term, so why not consider solar for your growing business? Knobelsdorff has 30 plus years of experience serving a multitude of markets and knows to solve any project that you want to tackle. Visit KEWAY.com to get your quote today.