Solar Power for Your Business: Leverage IRA Incentives to Fund Solar Panels
Is your business contemplating a transition to solar energy? Now is an opportune moment. Commercial solar panels are currently more budget-friendly than ever, thanks to the introduction of new incentives and tax credits by the Inflation Reduction Act (IRA).
Discover more about the solar provisions of the Inflation Reduction Act and how your business can leverage these incentives to support the cost of installing commercial solar panels.
The Solar Tax Credit Slashes Installation Costs by 30% or More The federal government extends a substantial tax credit to businesses adopting commercial solar panels, equating to 30% or more of the total installation costs. This significant reduction in upfront investment facilitates funding for commercial solar panel installations. The quicker your break-even point, the sooner you start generating returns on your solar investment. The tax credit expedites this break-even process by covering a substantial portion of installation costs.
Bonus Tax Credits Enhance Commercial Solar Installation Benefits In addition to the 30% federal solar tax credit, three bonus tax credits can be claimed for commercial solar panel installations:
- Domestic Content Bonus: Achieve a 10 percentage point increase in the solar tax credit value by meeting domestic content minimums.
- Energy Community Bonus: Projects located in energy communities enjoy a 10 percentage point increase in the solar tax credit value.
- Low-Income Bonus: Qualifying low-income community projects receive a 10 percentage point increase, with specific projects eligible for a 20 percentage point boost.
Learn more about the eligibility requirements for these bonus credits.
Faster Cost Recovery with MACRS Depreciation for Solar The Modified Accelerated Cost Recovery System (MACRS) is a depreciation system in the U.S. aiding businesses in recovering the costs of certain assets through annual deductions. Commercial solar energy systems qualify for a five-year recovery period. Businesses can simultaneously benefit from the 30% solar tax credit and MACRS depreciation. However, the depreciable basis of the project must be reduced by half the value of the solar tax credit claimed. For instance, claiming a 30% tax credit results in a 15% reduction in the project’s depreciable basis, allowing an 85% tax basis deduction.
Consult an Expert on Commercial Solar Tax Incentives As the leading commercial solar installer in New England, Boston Solar brings over a decade of experience and 5,000+ solar installations. Having catered to businesses of all sizes, we are a Proud Partner of the Boston Red Sox. Reach out to us for expert guidance on commercial solar panels and tax incentives. We are committed to ensuring you maximize the benefits of your solar panel investment, starting with an optimal incentive package.