Solar for Business Owners

Western Solar is one of the leading small-mid scale commercial solar installers in the State of Washington. If you own your own business and the building you operate in, you can likely significantly lower your operating costs by installing a solar system. In addition to the financial benefits, going solar is also a great way to distinguish your business from your competition both to potential customers and employees.

Net Metering for Businesses

In Washington State, all solar systems up to 100kW AC are eligible for retail-rate Net Metering. This means that businesses can enjoy the same free exchange of energy credits with their utility as a residential customer. Systems over 100kW AC can take advantage of self-consumption or utility PPAs (power purchase agreements) to save money on their utility bills.

Federal Tax Credit

Business, like residences, are also eligible for a Federal Tax Credit on their solar system. However, unlike the residential tax credit, which is dependent on the year the system is put into service, the federal tax credit for businesses can be based on the year work starts on the solar system. This means that provided a business owner signs a contract and invests 5% of the project cost in equipment before the end of the tax year, they can lock in their tax credit rate and then have up to four years to complete construction of the solar system and put it into service.

• Projects that are started by Dec 31, 2022 are eligible for a 26% tax credit upon completion
• Projects started after Jan 1, 2023 and before Dec 31, 2023 are eligible for a 22% federal tax credit,  after which the rate drops to 10%

It will therefore be to a businesses advantage to start their solar project before the tax credit reduces if at all possible, to maximize their financial gain.

MACRS and BONUS Depreciation

Solar infrastructure can be considered a depreciable asset for a business. The value of this will change with any given business based on their tax position, but a rough average value is 22% of the total system cost. This depreciation can be taken over a number of years or accelerated into the first year depending on what is more beneficial to the business in question.

Please note: Western Solar is not certified to give tax advice and all specific tax related questions should be discussed with your CPA.

REAP (Rural Energy for America Program)

The Rural Energy for America Program (REAP) provides grants and loans to farmers and rural businesses for energy efficiency improvements and the purchase of renewable energy systems. REAP grants can cover up to 25% of total eligible project costs, with a $500,000 maximum grant amount. REAP grants can be used in tandem with the Federal Tax Credit and MACRS or BONUS depreciation available for solar.