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The spike in electricity costs across the country over the past few years has put many business owners in difficult situations. Additionally, we discovered these same businesses didn’t know where to start to address these challenges when looking for potential solutions. Community Solar Advisors (CSA) was founded on the principle of simplifying the commercial solar journey. Our mission is to guide businesses through this transition seamlessly, eliminating any out-of-pocket expenses.
Q1 2024 USDA Grants Submitted
Q1 2024 Lifetime Savings
The Inflation Reduction Act (IRA) of 2022 establishes and extends the federal Investment Tax Credit (ITC) for solar photovoltaic (PV) systems at a rate of 30% of the total PV system cost. The 30% ITC was extended for 10 years, through 2032. Unlike tax deductions, this tax credit can be used to directly offset your tax liability dollar for dollar. The IRA extended the carryback period to 3 years, and the carryforward period to 22 years, in cases where the tax credit exceeds a customer’s tax liability in the ‘placed-in-service’ year. For PV projects greater than 1 MW AC in size, the IRA established prevailing wage and apprenticeship requirements in order to qualify for the full 30% “increased rate”, rather than a “base rate” which would only qualify for a 6% ITC. Projects with an output of less than 1 megawatt qualify for the “increased rate” irrespective of if prevailing wage or apprenticeship requirements are met.
Thanks to the Inflation Reduction Act’s “elective pay” (often called “direct pay”) provisions, taxexempt and governmental entities will, for the first time, be able to receive a payment equal to the full value of tax credits for building qualifying clean energy projects
Under the federal Modified Cost Recovery System (MACRS), businesses may recover investments in solar PV property through depreciation deductions over a 5-year established lifespan. For PV systems, the taxable basis of the equipment must be reduced by 50% of any federal tax credits associated with the system. The Tax Cuts and Jobs Act of 2017 included provisions that modified bonus depreciation under Code Section 168(k). PV projects that were placed in service after September 27, 2017, and before January 1, 2023, were eligible for 100% bonus depreciation, allowing eligible entities to deduct the entire allowable tax basis of the system in the first year of operation. Projects placed in service in 2024 qualify for 60% bonus depreciation, which means in the first year of service, companies can elect to depreciate 60% of the basis while the remaining 40% is depreciated under the normal MACRS schedule.
Rural Energy for America Program (REAP) grants are available to qualifying businesses and can currently award as much as 50% of total project costs! The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing. These funds are limited and scheduled to reduce to 25% later this year, so don’t delay.
More information can be obtained below at:
Many states create SREC markets to spur the development of solar by requiring electricity suppliers to purchase SRECs produced by in-state solar systems as part of their obligation under the state’s Renewable Portfolio Standard (RPS). This solar-specific requirement to meet a portion of the RPS with solar resources is often referred to as a “solar carve out.” Through the purchase of the SRECs, electricity suppliers are ensuring that their products meet the RPS-mandated amount of solar power. The monetary value of an SREC in these state markets is determined by supply and demand, with demand largely driven by electricity suppliers needing to meet their solar RPS requirement or pay a compliance premium.
Link below to some currently available SRECS:
DSIRE (dsireusa.org)
