Did you know that solar systems cost sixty percent less than they did a decade ago?
Even though solar systems are cheaper than they used to be, they still don’t come cheap. In fact, it might cost tens of thousands of dollars to put them on your business, school, or institution.
Fortunately, there are different ways that you can finance your solar panels. To help you figure out your commercial solar financing options, we have created a guide.
Read on if you are interested in finding out more.
Decide if Solar Is Right for You
Before you start making plans to install commercial solar panels, you should first make sure that your business is the right fit. If your roof does not get very much sunlight, it might not be feasible for you to install solar panels. This is why it is a good idea to reach out to a solar panel company. They will be able to provide you with a thorough analysis of the amount of sunlight your space receives and whether or not solar panels would be a good fit for your business. In addition, the solar panel company can provide you with various options for financing and even recommend a good installer if needed.
Another factor to consider is the amount of electricity your business uses. If your business uses a lot of electricity, you may be able to benefit from having commercial solar panels installed. The more power you are able to generate through solar energy, the more money you will save in the long run.
Learn About Solar Prices
If your building is eligible to receive solar panels, you will need to do some research to figure out how much it will cost you to install them.
Different types of solar systems have different prices and every consumer has different needs. This is why it can be challenging to know how much a solar system will cost you.
You can then start reaching out to lenders to understand green financing. They will be able to tell you what kinds of financing are available to you.
Buying Solar Panels with Loans or Capital Leases
There are many business owners who do not have enough money to purchase solar systems. But those who have good credit will be able to make these purchases.
Most lending institutions recognize that solar power is a powerful and stable investment.
Even though it can cost tens of thousands of dollars for businesses to install solar panels, they will save themselves at least several hundred dollars per month on their electricity bills.
Since most solar systems are capable of lasting for up to twenty-five years, most lending institutions understand that it won’t be difficult for business owners with good credit to pay their solar loans back over time.
In many cases, local lenders will have the best rates and the fastest turnarounds.
You can also finance your solar panel system purchase by getting a capital lease. These are different than “solar leases.” With a capital lease, you will be able to physically own your solar system after you pay it off. Capital leases usually have shorter terms than conventional loans.
By getting this kind of lease, it will still be possible for you to take advantage of the solar system tax-saving incentives.
Purchasing a Solar System with Cash
If you are able to purchase a solar system with cash, you will be able to benefit from solar electricity savings as well as tax savings.
Purchasing a solar system with cash is easier than many people realize. Even though this does require making a large investment, it costs much less to install a solar system than it did in the past.
Every business that pays taxes is eligible for the Solar Investment Tax Credit (ITC). There are other tax credits that are also available for business owners.
Therefore, many business owners are able to reduce their solar installation costs by up to half.
Leasing Options for Non-Profits
If you lease solar panels, you will need to make monthly payments.
At the end of the lease terms, you will usually have the option to negotiate or buy out. In most cases, the fees are lower for buying out of a lease.
If you run a non-profit, there are various lease programs that might be available to you.
Solar Tax Credits
If you are a business owner, you might be able to take advantage of solar tax credits. The Solar Investment Tax Credit (ITC) is a federal tax credit that is available for businesses that install solar systems. The ITC is equal to 30% of the cost of installing a solar system. This means that if you spend $100,000 on a solar system, you could get a tax credit of $30,000.
The ITC is available for both residential and commercial solar installations. It was created to encourage businesses to switch to solar power. As a result of the Inflation Reduction Act of 2022, the tax credit has also been extended to 10 years. Meaning that the 30 percent tax credit will be available until 2033 and then gradually decrease over the next few years.
USDA REAP Grant
Rural Energy for America Program is a program that was created to help facilitate the development of renewable energy projects and energy efficiency improvements in rural America. The grants are available to agricultural producers, small businesses, and rural municipalities. Grants may be used for up to 25% of eligible project costs, including the purchase and installation of equipment necessary for the generation or distribution of renewable energy from a variety of sources, such as small wind, solar energy, and biomass.
Find the Right Commercial Solar Financing Today
If you are looking for the right commercial solar financing solution, it is essential to understand the many available options.
Are you ready to install solar panels on your business, school, or institution? If so, we can help you. You could be eligible to receive even more tax incentives on top of the 30% mentioned in this article!
If you have questions, get in touch with us so we can give you all the details.
Don’t hesitate to request a quote once you are ready to get started.