Switching to powering part or all of your facility with solar energy has many benefits, including significant savings of up to 70% on your utility bills, zero rate increases, and promoting energy independence by taking control of your power.
Solar energy systems even pay for themselves in time — usually in as little as seven years. And thanks to a variety of local and federal incentives, the upfront cost of acquiring and installing such technology is more affordable than you think.
The federal investment tax credit (ITC) is a one-time benefit that allows business owners to claim up to 30% of the total cost of their installed solar energy system (or other qualifying project). It’s currently the most valuable incentive business owners can claim, offering savings in the thousands of dollars for those who own and install systems.
Tax credits differ from deductions in that they’re dollar-for-dollar, which are directly subtracted from the amount you owe or added to the amount you’re due as a return.
Fill out IRS Form 3468 to claim the federal ITC. Here are some eligibility guidelines to know for claiming the federal ITC:
The federal production tax credit (PTC) is a 10-year, ongoing credit related to a solar energy system’s kilowatt-hour production sold during the tax year. The PTC can be claimed annually over 10 years following a system’s installation at up to 2.75 cents per kilowatt hour (kWh).
Complete IRS Form 8962. The eligibility requirements for the ITC and PTC are the same.
Note: You cannot claim both the ITC and PTC. Our Solar Advisors at Solar Micro Grid Systems can help you understand which incentive might be better for your specific project.
The Rural Energy America Program, or REAP, provides loans and grant funding to agricultural businesses and rural small businesses so they can install renewable energy systems, such as solar, on their properties. Qualified applicants can access guarantees on loans of up to 75% of the project’s total costs, grants for up to 50% of the total cost, or a combined loan/grant guarantee funding of up to 75%.
Applications must be submitted during the application window period. Depending on your solar energy project cost, you’ll either fill out form 4280-3A, 4280-3B, or 4280-3C.
The Rural Energy Savings Program (RESP) offers affordable loans to rural utilities and businesses that provide energy efficiency loans to consumers. It’s essentially a low-cost financing option that qualifying businesses can take advantage of. Loan terms are 20 years at a 0% interest rate, up to a 5% interest rate for relending to end users up to 10 years, with up to 4% of the loan total allowed for startup costs.
RESP applications are received on a first-come, first-served basis until funds are depleted for the respective year. Before applying, check to make sure the application window is open.
Eligible applicants for RESP include:
The state of Michigan has a Solar Energy Facilities Taxation Act that provides a tax incentive to owners of utility-scale solar energy generation facilities that build new solar energy facilities and provide the government with a stable revenue stream from said facilities. Qualified facilities can seek a tax exemption on their property taxes for up to 20 years.
In order to qualify, owners must file an application, which is reviewed and approved by the local Michigan governing body and the State Tax Commission.
Net metering is a system that credits solar energy system users for any electricity they add to the grid. For example, if your solar energy system generates more power than your business requires over a certain period, it can send excess electricity to the grid for a credit or payment, which can thereby help maximize your total cost of a solar investment.
You must own your system to take advantage of net metering. We also suggest working with your area’s utility provider before installation to fully understand whether this option is offered and the best practices for taking advantage of it.
Solar Micro Grid Systems is committed to delivering comprehensive solar energy solutions to property owners in Michigan. Contact us today to speak with one of our Solar Advisors, who can help you understand how much money you could save and which incentives are available to you.
Ready to take control of your power? Contact us for more information on our suite of comprehensive solutions and for a free, no-obligation quote. Act now and start saving sooner!
