Solar Investment Tax Credit Update 2022
The Solar Investment Tax Credit (ITC) 2022
Time is running out to save on solar for your commercial property and business.
If you’ve been thinking of going green, now is the time to lock in the biggest savings. The solar investment tax credit (ITC) will remain at 26% until the end of the year, when it will drop by four percent and continue its decline. All solar energy projects that begin construction this year will be eligible for the 26% tax credit. The credit will drop to 22% in 2023 for all market segments, including commercial and residential, then down to 10% permanently for the commercial and utility markets in 2024. The tax credit for residential properties will come to a close in 2024.
Commercial and utility-scale projects that have started construction before December 31, 2023, may still qualify for the 26% or 22% ITC if they are placed in service before January 1, 2026. Check the IRS-issued guidance for information and to see if your project qualifies for this incentive.
Why Business Owners Should Invest in Solar
Since the ITC was enacted in 2006, the U.S. solar industry has grown by more than 10,000% – creating hundreds of thousands of jobs and investing billions of dollars in the U.S. economy. For commercial property owners, solar benefits the bottom line with the ITC equal to 26% of the basis that is invested in an eligible solar property that has begun construction. But beyond the economic benefits, solar is the smart choice for our environment.
Benefits of Direct Ownership Over Shared Solar
Most businesses are looking to offset some or all of their electricity use with solar power, making solar an ideal economic and environmental solution. Simply put – solar is good business. Consumers and employees alike value sustainability now more than ever.
Property owners have a choice when it comes to investing in solar. The two most common choices are direct ownership through installing a solar panel system on your building, or a shared solar program that allows business owners to lease solar power generated by community grids without installing a system.
Direct Ownership Solar
Direct ownership, or installing a solar panel system at your commercial property, gives the owner complete control over their solar investment. Solar systems can be customized to your needs – you can power a percentage of your building’s electricity use, offset usage in common spaces, or provide car canopies and electric vehicle charging stations. One of the biggest benefits of direct ownership is the tax credit and rebates. In addition, a solar array investment often increases property values and generates an average return on investment in less than ten years.
Shared Solar Programs
A shared solar program allows home and property owners to subscribe to a solar energy project in their community. Participants receive a credit on their utility bill for their portion of the clean energy produced. While this is an easy way for businesses to go green without footing the upfront cost of installing solar panel systems, the availability of shared solar is limited, and businesses do NOT receive the benefits from ownership like tax credits or reduced energy costs.
Solar is an investment in the future of our state. Florida is leading the way in solar energy, ranking #4 nationally for solar. The typical solar investment can see a return on investment (ROI) in five to 10 years when using the ITC and accelerated depreciation. Advanced Green Technologies value ROI based on energy consumption combined with intangibles such as preserving the rooftop and other additional benefits.
Don’t wait any longer. Take advantage of the highest tax credit available for solar and get your project estimate today. For a free solar site analysis, call (800) 638-6869 or click here.