Economics

Commercial

As part of the American Recovery and Reinvestment Act of 2009 (stimulus package) enacted by Congress on February 17, 2009 solar power has become more cost effective than ever before.

For commercial solar projects completed in calendar year 2009, and 2010 that are eligible for depreciation or amortization (typically those owned by corporate tax filers) can receive a 30% upfront cash grant in lieu of the 30% tax credit. This solar grant does not ever have to be repaid and is not subject to federal taxes. (See American Recovery and Reinvestment Act of 2009 sections 1603, 1104 for complete wording).

At SolarLogic we understand that the decision to invest in renewable energy systems is above all else a financial decision. In many cases a well implemented solar power system may have an (IRR) Internal Rate of Return in the range of 10 to 20 percent. We can provide an expert solution that can help lower your operating costs, boost your bottom line, and increase your community image.

Ask us about the new 30% Federal Solar Grant for commercial projects, the time to go solar is now!

Rebates, Tax Credits and Other Financial Incentives

Many incentives exist for commercial customers installing solar PV systems including rebates from the California Solar Initiative, Federal Investment Tax Credits, an accelerated depreciation schedule, and Renewable Energy Credits (REC's). Many local cities or counties are also implementing their own renewable energy incentive programs. Contact us to find out more about your area.

Rebates

The California Solar Initiative provides rebates to solar PV customers in accordance with the following table. The table level of the rebates decreases over time as the cumulative amount or solar power installed increases. The rebate rates also vary depending on whether the customer is residential, commercial, or non-profit/government.

Federal Tax Credits

The Federal Investment Tax Credit for commercial and business owned systems is 30% of the net system cost with no cap. This can equate to tens if not hundreds of thousands of dollars dependent upon the solar system size. The credit can also be carried forward 15 or back three years.

MACRS 5-Year Accelerated Depreciation

Business owned systems may be eligible for the Modified Accelerated Cost Recovery System (ref: IRS form 4562). The depreciation schedule for the system cost beginning in year 1 is: 20%, 32%, 19.2%, 11.5%, 11.5%, 5.8%.

Renewable Energy Credits (REC's)

The owner of the solar PV system earns one Renewable Energy Credit for each 1,000 kWh of solar power produced. The REC's can then be sold on the open market. The market for REC's is greatly driven by the Renewable Portfolio Standards (RPS) that dictate the percentage of power utility companies must derive from renewable sources in a given timeframe. In California the RPS is 20% by the year 2010.

Local Incentives

Some local cities such as San Francisco and Santa Monica have their own solar PV incentives programs that can add to the savings when installing a system.

The bottom line:

Is your company ready to mitigate higher rates of inflation in the price of electricity? Solar panels won't solve all your energy problems. But if your management foresees rising inflation in electricity prices over the course of the next 20 years (did someone say carbon legislation?), you should probably take a harder look at solar.