Solar Energy Incentive Programs Provide Immediate ROI As Energy Prices Increase, Study Says

07.25.14

Solar Energy Incentive Programs Provide Immediate ROI As Energy Prices Increase, Study Says

Electricity prices hit an all-time high in January 2014, and utility rates are expected to continue to climb over the next decade due to limited production, weather volatility and a host of other factors. The U.S. Energy Information Administration predicts price increases of more than 3 percent this year alone, with the steepest price hikes anticipated in the Northeast.

Fortunately, numerous overlapping state and federal incentives are currently available for solar energy projects, making this an excellent time to invest in renewable energy and protect your company from rising electricity costs. These federal and state-funded programs are designed to offset these increasing costs, and leading states are encouraging solar for most successful commercial clients.

Under the federal business energy Investment Tax Credit (ITC), companies that invest in a solar energy system receive a 30 percent tax credit with no upper limit. Businesses investing in solar can also deduct related equipment from their federal taxes through the Modified Accelerated Cost-Recovery System (MACRS) of depreciation. Under MACRS, property may be depreciated over five years for a fast payback on your investment.

In addition to federal tax credits and deductions, companies in Massachusetts, New Jersey and Maryland can earn revenue from their solar grids by selling Solar Renewable Energy Credits (SRECs), one-megawatt-hour units of renewable energy, to their utilities. Utilities in those states must buy a specified share of their energy through SRECs. Participating companies receive direct revenues from their solar power production in addition to the savings on their electric bills.

Between the ITC, MACRS deductions, SREC payments and immediate savings on electric bills, businesses in Massachusetts, New Jersey and Maryland are recouping the costs of their solar energy systems in as little as 4 years and achieving ROIs of 15-20 percent. Following the payback period, the systems continue to provide clean, free electricity and all the environmental benefits of solar for decades.

The federal ITC has been extended through 2016. Given the uncertain political environment and ongoing volatility in the energy markets, this is a prime time to leverage available incentives, make the move to solar and free your company from rising energy costs.

Find Out What Incentives Your Company Qualifies For >

solar-investment-return-chart