Solar incentives come in many different forms. Here are a few common programs:
Tax credits
A portion of your project costs can be deducted from your tax obligation, reducing the amount of taxes you pay when you file. In addition to the federal ITC available to all Americans, some states have their own state solar tax credit in place.
Business-owned solar power systems are eligible for two nationwide incentives in the US: the Investment Tax Credit (ITC) and the Modified Accelerated Cost Recovery System (MACRS).
MACRS, allows the business to write off the asset value of a solar PV system in only five years. This depreciation counts as a tax deductible expense, and the cash flow of your solar investment improves.
You can combine the ITC and MACRS, but you must subtract half of the ITC from the solar asset value. For example, if your solar installation gets the 26% tax credit available in 2022, you can depreciate 87% of its value over five years (after subtracting 13%).
Rebates
A partial refund is returned to the owner after they buy their system. Typically, this involves buying from a solar vendor, then filing for a rebate with the utility company, local government, or other organization running the rebate program.
Property Tax Relief
In some states, solar systems are exempt from property taxes. The building is assessed as if it did not have a solar power system installed, reducing the property owners tax burden.