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Net Metering, Tax Incentives, and System Payback

Net metering: Some states and utility companies offer an incentive called net metering that can significantly increase your solar savings over time.

Under net metering, your utility company provides you with credits for the excess electricity your system generates and sends to the grid. When you need to pull electricity from the grid instead of your system, it counts against the credits you bank over time. At the end of your billing cycle, your utility company only bills you for your “net” electricity consumption. 

Business Incentives for Upgrading with Solar

​​Switching to solar energy leads to great savings and a strong return on investment over time. It's a smart financial decision.

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Here’s why so many businesses choose to install solar:

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Commercial solar is affordable, thanks to incentives

The upfront cost of a commercial solar panel system may seem overwhelming, but many incentives significantly lower the price. Solar incentives available for businesses, can reduce the cost of your system by nearly 70%:

• Federal Investment Tax Credit (ITC): Whether you’re a business owner or homeowner, the federal tax credit is the most significant financial incentive for all solar shoppers. At least until 2025, the ITC provides a tax credit equal to 30% of the upfront cost of solar for businesses. It’s a credit, not a deduction, meaning if your project costs $100,000, the ITC reduces the amount you owe the federal government in taxes by $30,000. If your system includes U.S.-manufactured equipment or is installed as part of a low-income residential building project or economic benefit system, you may also qualify for additional tax credits on top of the 30%!

• Modified Accelerated Cost Recovery System (MACRS): MACRS is a depreciation benefit that allows you to lower your taxable earnings and recover the depreciated value of your solar installation over five years. When you combine MACRS with the solar tax credit, you can earn tax incentives worth about 70% of your system’s cost. 

• Bonus depreciation: Bonus depreciation is similar to MACRS, but you take the full depreciation benefit in the first year of your investment instead of over five years. You have to choose between MACRS and bonus depreciation.