Utility costs are not going to go down. Solar power is a way to lower and control future costs, lower current taxes, and lock in a future income source likely to be inflation resistant.
Solar power is one of the few improvements a small business can make to both reduce costs and increase income. Both State and Federal programs exist to incentivize solar installations. Small businesses sitting on cash reserves could invest in solar power to control costs and add a new income stream.
Solar Investment Tax Credit (ITC)
The Solar Investment Tax Credit is a 30% multi-year tax credit for residential or commercial solar installations that meet specifications. Unless extended, this credit is available through December 31, 2016.
These long term tax credits are credited with a 41% increase in solar installations in 2013 over 2012 and the generation of 143,000 American jobs [according to the Solar Energy Industries Association (SEIA)].
Tax credits are also given credit for lowering the price of producing solar energy, making it more affordable:
Department of Energy (DOE) Loan Guarantee Program
Larger solar projects have been supported by the United States Federal Department of Energy loan guarantee program. The White House Rural Council was created to increase rural opportunities and backed with loan guarantees. Projects supported so far include:
- California: $1.2 billion to construct California Valley Solar Ranch (CVSR) in rural San Luis Obispo County
- Hugoton, Kansas: first cellulosic biofuel facilities built in the United States
- One Nevada Transmission Line bringing wind and solar generated in Wyoming, Nevada and Idaho to California cities
State Solar Tax Credits and Incentives
A new DSIRE database of state incentives for renewables and efficiency is scheduled to be available in December 2014. There is an existing database containing both state and regional solar tax credits and incentives.
The number of credit and financing programs is far more than you would expect. Information in this database is extensive and includes:
- Green Building Incentives
- Leasing programs
- Local rebate programs
- PACE financing
- Performance-based incentives
- Property tax incentives
- Sales tax incentives
- State grant programs
- State loan programs
- State rebate programs
- Utility grant programs
- Utility loan prgorams
- Utility rebate programs
The DSIRE database also includes rules, regulations and policies including:
- Appliance / equipment efficiency standards
- Building energy codes
- Energy efficiency resources standards
- Solar / wind access policy
- Solar / wind contractor licensing
- Solar / wind permitting standards
This is not all of the data available in the DSIRE database. Communities in Massachusetts have community renewable energy products where local residents and businesses contribute to community solar arrays and benefit from the energy generated. Some have reduced their electric bills to zero by participating.
Small Business Case Studies
This excellent video explains how an established local heating and air conditioning business signed a 15 year lease agreement with their local power company with a 5 year payoff and 10 years guaranteed income. They eliminated their power costs and created a substantial income.Video Highlights:
- Creates local jobs
- 30% federal tax credit
- 15 year lease buys their power
- Incentives have improved
Many of the largest solar development companies like Martifer Solar can be called on to provide feasibility studies to maximize feasibility and minimize risk. Their existing connections and expertise can provide the strategic partnerships required to ensure maximum ROI.
Finding a solar development company is a shortcut to identifying existing programs. They should already know all of the incentives available in your area or have the resources and connections to find out.
Small businesses of all sizes could also use the DSIRE database to research the types of programs available to them. Between grants, tax credits, loan guarantees and other incentives you could be losing money by not going solar.