Going solar is about more than being green; investments in on-site solar energy translate into a compelling ROI for your business or commercial property. And the time has never been better! Right now the corporate tax structure allows the fully project cost to be depreciated in the first year, and the Federal Solar Investment Tax Credit is still available for commercial solar projects. These tax benefits can total almost 50% of the system cost in the first year. The economics show clear benefits of solar panels for businesses and make solar an opportunity that business can no longer afford to ignore.
Solar offers a clear value proposition that is evident in the numbers of installations nationwide. There are now more than 2 million solar installations across the U.S., and forecasts expect that number to double by 2023. The solar industry’s rapid growth shows no signs of slowing as more and more homeowners and businesses see the environmental and economic benefits of solar.
There are additional benefits of solar panels for businesses here in Colorado. Commercial property owners can take advantage of production-based incentives paid out by Xcel Energy over a 20-year period. For a 500 kW system (or roughly a 75,000 square-foot rooftop), these renewable energy credits can equal more than $27,000 in the first year of incentive payouts. In addition, a system this size could reduce utility expenses by approximately $30,000 in year one alone, increasing net operating income by $57,000.
This all means that solar is no longer only a sustainability initiative, it’s also an essential investment to consider.
Now is the time to capture the money-saving benefits of clean solar energy for your business. The federal solar tax credit was set to phase out at the end of 2019, dropping to 26% in 2022, 21% in 2023, and landing at a permanent 10% for commercial properties starting in 2024. However, with the Inflation Reduction Act of 2022, the federal solar tax credit has increased to 30% and will remain there through 2032, meaning the savings with solar will be even higher for the next 10 years.
In addition to the tax credit and renewable energy credits, Colorado’s Commercial Property Assessed Clean Energy (C-PACE) program now allows businesses to gain the benefits of solar with no money out of pocket, making these solar investments cash flow positive from day one. Building owners can bundle the cost of a new roof, solar PV system, and even LED lighting or HVAC updates into one C-PACE package for a fixed-interest loan with terms up to 25 years. This non-recourse financing is tied to the property via a special tax assessment through the county, and as a result, C-PACE financing can transfer to the next owner if the property is sold.
Gain the Benefits of Solar Panels for Businesses
While every commercial property owner goes solar for a unique reason, they share a common desire to boost NOI, raise property value, and differentiate themselves in a competitive market. Could you cash in on these benefits of solar for your business or commercial property? Talk to one of our non-commissioned solar experts to get a custom roof assessment, utility analysis, and solar ROI report. Your consultation is free, it’s easy, and it’s the first step toward saving with solar.
Not ready for a free consultation just yet? Check out our guide to commercial solar. It's filled with information about why solar is a smart investment, how to assess commercial solar proposals, and more about the process of going solar for your business.
Hear from Our Customers: Ogilvie Properties on Saving with Commercial Solar