Oregon businesses looking to install solar in 2021 need to know about valuable commercial solar incentives, and how to qualify for them.
Several commercial solar incentives are available to Oregon businesses that could save hundreds of thousands of dollars on going solar.
Here is a breakdown of the most valuable 2021 commercial solar incentives in Oregon.
FEDERAL SOLAR TAX CREDIT (ITC)
Businesses that install or begin to install their solar panels in 2021 are eligible for a 22% tax credit through the federal solar tax credit (aka Investment Tax Credit, or ITC).
The entire cost of the solar installation, including parts and labor, is covered under the ITC. If a business does not have enough tax liability to take the tax credit in 2021, they can carry over the credit to following years.
Unfortunately, the 22% tax credit permanently decreases to 10% in 2022 for commercial solar installations, so it’s important to act soon if businesses want to save the most they can on going solar.
To lock in your 22% solar tax credit, contact Green Ridge Solar today!
ENERGY TRUST OF OREGON
Oregon businesses that get their power from Portland General Electric (PGE) or Pacific Power are also eligible for solar incentives through the Energy Trust of Oregon.
Businesses can receive $0.20 to $0.45 per Watt for installing solar, with a maximum rebate of $35,000 for PGE customers (400kW max) and $20,000 for Pacific Power customers (200kW max). This rebate comes in the form of a check after the installation is completed.
To qualify for the Energy Trust of Oregon commercial solar incentive, businesses must work with an Energy Trust solar ally contractor, such as Green Ridge Solar.
Contact Green Ridge Solar today to see how much your business could save with solar incentives.
Businesses that install solar in Oregon can also utilize accelerated depreciation through the Modified Accelerated Cost-Recovery System (MACRS) to reduce their cost of going solar.
Depreciation is the loss of value that occurs over time with the item a business purchased for a specific use. Businesses are eligible to deduct this “loss in value” from their federal taxable income when used for their business.
85% of total solar installation costs are eligible for depreciation. This can add a tremendous amount of financial value to your system.
Let’s use an example of a solar system that cost $100,000.
As you can see, the depreciable life of solar panels is 85% of the full solar system cost which may be depreciated roughly as follows: Year 1: 20%, Year 2: 32%, Year 3: 19.2%, Year 4: 11.5%, Year 5: 11.5%, and Year 6: 5.8%.
RURAL ENERGY FOR AMERICA PROGRAM (REAP)
Agricultural businesses and businesses in Oregon’s rural areas have the opportunity to receive grants through the United States Department of Agriculture (USDA) for installing solar.
The USDA provides grant funding to agriculture producers and rural small businesses for solar electric systems through the Rural Energy for America Program (REAP). These solar grants cover 25% of the total cost of going solar, with a maximum grant amount of $20,000.
To qualify, agricultural producers can be located in either a rural or non-rural area, but at least 50% of their gross income must come from agricultural production. Non-agricultural businesses must be located in rural areas with populations of 50,000 residents or less. Check to see if your address is eligible using the USDA address lookup.
These businesses must also be financially solvent, have no delinquent or outstanding federal taxes, have no judgements or debarment, and only the owner of the business can claim the REAP grant.