The Investment Tax Credit (ITC), commonly referred to as the federal solar tax credit, stands out as the top and widely embraced incentive for commercial solar projects. This credit allows you to directly reduce your federal tax liability by a percentage equivalent to your solar installation expenses in the year of system installation.

For commercial solar energy systems commencing construction prior to 2033, there is a 30% federal tax credit available. Virtually all commercial and utility-scale solar projects meet the criteria for the solar tax credit. Reach out to Southeast Energy Solutions for further information.

The Modified Accelerated Cost Recovery System (MACRS) offers businesses a depreciation method, allowing recovery of their solar investment over five years through annual tax deductions.

Commercial Solar Installations are eligible to receive both the solar investment tax credit (ITC) and the MACRS depreciation. ‍On projects where they are both applied, the project's depreciable basis is reduced by half of the value of the 30% solar tax credit.
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MACRS is a federal incentive available to commercial solar projects in all 50 states.

The Production Tax Credit (PTC) is a per-kWh tax credit for commercial solar projects, providing an annual tax credit for the initial ten years of system operation. The base credit is adjusted annually based on inflation.

Commercial solar projects face a choice between the federal solar tax credit (ITC) and the Production Tax Credit; they cannot benefit from both simultaneously. While utility-scale projects and large installations in extremely sunny regions might find more value in the PTC, most commercial solar projects generally derive more value from the Investment Tax Credit (ITC).

The Production Tax Credit is a federal solar incentive available to commercial solar projects in all 50 states.

Historically, non-profit organizations, being tax-exempt, were not eligible for solar tax incentives. The Inflation Reduction Act of 2022 changed this by introducing a direct pay option for tax-exempt entities, such as governments, churches, and public schools. Now, qualifying tax-exempt organizations can receive the full value of the solar tax credit as a direct cash payment.

The USDA Rural Energy for America Program (REAP) aids agricultural producers and rural small business proprietors in establishing renewable energy systems. It offers grants covering up to half of the total eligible project expenses. Combining the 30% federal solar tax credit with the 50% grant allows for a substantial 80% reduction in the initial project costs. Additionally, the program offers loan financing options for any remaining project expenses.

The Rural Energy for America Program is a federal incentive, accessible to rural commercial solar projects across all 50 states.

Farmers and rural small enterprises qualify for REAP grants covering half of their commercial solar setup expenses.

These grants, when combined with solar ITC and MACRS depreciation, can result in savings exceeding 80% on your solar installation investment!