Commercial Solar Tax Incentives

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Commercial Solar Tax Incentives

Commercial solar tax incentives in the Carolinas include a 26% Federal ITC, Accelerated Depreciation (MACRS) plus potential state,utility and local municipality solar programs.

Commercial Solar Investment Tax Credit (ITC)

The Solar investment tax credit (ITC), also known as the Federal solar tax credit, allows Commercial solar customers to take 26 percent of their solar investment as a credit against their federal tax liability. The ITC applies to the complete costs of commercial solar systems, and there is no cap on its value (though the Commercial solar customer must have a tax liability to benefit from a tax credit).

Please note: at the end of 2020, the ITC goes down to 22% and continues to decrease in the future years. For more information on the ITC, you can go to https://www.seia.org/initiatives/solar-investment-tax-credit-itc

Accelerated Deprecation (MACRS)

Commercial clients may also benefit from accelerated depreciation (MACRS) on their Solar investment. After applying the 26% Federal ITC, 87% of the solar investment solar can be depreciated. Since the MACRS benefit is a deduction, the MACRS final cash impact depends on the companies marginal tax rate. On average, the depreciation benefit for Renu’s clients equates to ~20-25% of the costs of the system. (For more information, refer to IRS Publication 946, IRS Form 4562: Depreciation and Amortization, and Instructions for Form 4562, available on the IRS web site at https://www.irs.gov/pub/irs-pdf/p946.pdf.)

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State and Local Tax Incentives

State Tax Credit

In South Carolina, Commercial Solar customers can benefit from a 25% Solar Tax Credit up to $140,000 which equates to another $35,000 in potential tax savings. Please note, that the max South Carolina Tax Savings in any year is $3,500 though you can take that up to 10 years.

In North Carolina, Commercial Solar customers benefit from a Property Tax Abatement for solar projects. Additionally, in North Carolina, Commercial Customers who are customers of Duke Energy may benefit from the Duke Energy Solar Rebate.

Other Local Solar Benefits

At Renu Energy Solutions, out Commercial Solar Division is constantly monitoring for additional local solar incentives across North Carolina and South Carolina to maximize your solar ROI. Let us know where your business operates below and our Commercial solar team will provide a detailed analysis of the benefits and the ROI of a Commercial Solar investment.

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