Financial Incentives for Businesses Going Solar
7 Financial Incentives for Missouri Business Owners to Go Solar in 2018
Does your business have a monthly electricity bill?
Do you really want to pay your business’s electricity bill?
If you replied “Yes” and “No,” then this guide to going commercially solar is for you.
2018’s a banner year for commercial solar benefits. Now, instead of bleeding budgets dry, our solar systems do the opposite; they generate both electricity and significant savings for business owners, thanks to seven major solar incentives.
Here’s the quick run-down of each incentive:
1. 30% FEDERAL TAX CREDIT THROUGH 2019
Every American property owner who purchases a solar system is eligible to deduct 30% of its cost from their taxes. You can choose to receive the 30% either all at once or over several years. Of course, we advise that you consult with your accountant or tax professional for your specific qualifications).
Heads up, though – the 30% tax credit only goes through 2019. Systems installed after 2019 will receive progressively smaller tax credits:
- 2018-2019: 30%
- 2020: 26%
- 2021: 22%
- 2022 and after: 10% for commercial systems
So the sooner your panels are installed, the better.
2. NET METERING
On sunny days, solar systems can generate more electricity than your business needs at that instant. If you don’t have energy storage, your extra electricity will flow back into the grid.
Missouri law mandates that your local utility credits you for that electricity. So, each month, your energy bill is:
(Market price of the electricity they gave you (during gloomy days and nights))
– (Wholesale price of the electricity you gave them (during sunny days))
= Your (much smaller) bill
And it gets better.
In many cases, depending on your utility provider, if you’ve given them enough electricity to completely offset the price of the electricity they’ve given you, you pay nothing and your extra energy credits roll over into future months.
So, if your business’s solar system is an electricity-generating beast in June but wimpier in dark December, you can use June’s energy credits (instead of your budget) to pay your December energy bill.
Basically, net metering = major savings on your electricity bill.
3. PROPERTY TAX EXEMPTION
Good news from the U.S. Dept. of Energy: “In Missouri, solar energy systems not held for resale are exempt from state, local, and county property taxes.”
4. 5-YEAR BUSINESS DEPRECIATION
American businesses can also expense 85% of their solar system’s cost the 1st year and the remainder over the next 4-years.
The previous four incentives apply to every commercial solar owner in Missouri.
The following three depend on which part of Missouri you’re in (although each still covers much of the state):
5. PACE (Property Assessed Clean Energy Program)
Your business gets a solar system.
No out-of-pocket cost and no debt.
Too good to be true?
Not according to Missouri’s PACE program.
This program allows businesses in participating areas to finance 100% of their solar system’s cost for up to 20 years. Each year, you’ll repay part of the system’s cost via an assessment added to your property’s tax bill.
Since your annual energy savings may more than offset your tax payments, you’ll end up with a positive cash flow.
This informative and entertaining video explains PACE further:
As of July 2018, 118 Missouri towns and counties participate in PACE. To see if you’re in one of them, just use the easy search button on PACENation’s list.
6. REAP (Rural Energy for America Program) GRANTS
If you’re an agricultural producer or a small, rural business, check here to see if you qualify for U.S.D.A.’s REAP program. Most businesses outside of metropolitan areas can receive not only a loan guarantee, but also 25% of their entire going-solar expenses!
Numerous Missouri-based utilities offer substantial rebates on the up-front cost of your solar system, including:
- Columbia Light and Water (up to $5,000)
- Empire District Electric
- Kansas City Power and Light (ends in 2020)
- Ameren Missouri
So purchasing solar panels for your business is almost the opposite of a big expense. And if you’re considering leasing your panels or entering a P.P.A. (power purchase agreement), stay tuned; our guide to those is coming soon.
Interested in speaking with an expert Energy Consultant regarding your business’s needs for solar? We are ready when you are. We offer free, no pressure solar quotes and we would love to chat with you! Start now by clicking here!