The Solar ITC Explained
Solar Investment Tax Credit (ITC) Highlights:
- 2022 ITC rate is 26%
- This is a “dollar for dollar” savings
- 2023 steps down to 22%
Previously scheduled to step-down in 2021, the Solar ITC (Investment Tax Credit) was extended as part of the COVID-19 relief spending. This translates into a 4% discount and shorter payback period for businesses still looking for commercial solar solutions.
Businesses with high electricity costs investing in solar take advantage of the dollar-for-dollar tax credit, all while reducing electricity bills and reliance on aging infrastructure.
Thanks in part to the Solar ITC, typical electricity bill savings for Revel Energy customers is between 50 to 80%. The first step-down phase in 2020 dropped the Solar ITC from 30 to 26%, and instead of another 4% dip for 2021, the credit value was extended and will stay at 26% until 2023.
How Is The ITC Credit Value Calculated?
For a business considering commercial solar investment at a gross cost of $500,000, the tax credit would be worth $130,000. Here’s an example case study of a business taking advantage of the Solar ITC to help pay for their commercial solar system.
That means their tax bill for that year is $130,000 less than they had planned, keeping much needed cash in the company.
Businesses that don’t need to use the whole credit in one year can spread it out over time potentially eliminating any tax liability for several years. Along with acquiring the 26% tax credit, the business also acquires depreciable assets. In this case, after Federal bonus and State depreciation, the net cost comes out to around $230,000.
Similar systems have saved businesses an estimated $100,000 by generating free electricity. That is more money they used for hiring much needed talent, upgrading machinery, or any other cash needs the company may have. Creative financing options like the Commercial Property Assessed Clean Energy, or C-PACE, help make commercial affordable for more businesses.
Contact us today to learn how much your business could save on its annual electricity bills with commercial solar.
About Revel Energy
Revel is on a mission. Dedicated to renewable energy solutions since 2009, Revel Energy was formed to provide Commercial, Industrial and Agricultural businesses with alternative energy beyond solar. Revel stands out from the competition by paying attention to what makes good business sense to each individual client, implementing a wider range of technologies to free up capital and make businesses sustainable and more profitable.
Commercial grade rooftop solar is ideal for: manufacturing, warehousing, logistics, industrial, retail, hospitality buildings and more with over 10,000 sq. ft. rooftops.
Free standing carport solar generates added solar power for properties with limited rooftop space. Added benefits include shading and protection for employees vehicles.
Crucial for reducing peak demand charges. Automated to supply electricity when your panels won’t. Energy storage is ideal for businesses that incur significant peak hour charges
LED LIGHTING RETROFIT
Generating independent solar power is one piece of the puzzle. Energy saving equipment like highly efficient LED Lighting completes the system. Significantly reduce energy usage.
Client Testimonial: Kelemen Company
Corporate Business Park in Irvine, CA has created significant electricity cost savings through commercial solar installed across the 5-building business park.
Client Testimonial: Tice Gardner & Fujimoto LLP
See how this CPA firm saved on electricity and gained valuable tax credits through commercial solar that they used to keep cash in the businesses.