If your company assessed solar in the past but decided not to install due to the upfront investment, you’re not alone. Many businesses in Pennsylvania have put solar on the back burner due to cost, even as utility bills continue to rise. However, there’s good news: the cost to go solar changed drastically in August of 2022 when the Inflation Reduction Act was reformed. In this blog, you’ll get the key solar updates that impact Pennsylvania businesses. TerraSol Energies Inc. prepares in depth, financial solar reports for businesses exploring solar in the mid Atlantic region (You can request and learn more about our free solar reports here).
Nine Commercial Solar Updates in Pennsylvania
Here are the commercial solar updates for Pennsylvania business in 2023.
Tax Credit Increase
The tax credit for going solar has increased from 26% to 30%. This means that you can save even more on your taxes by installing a solar energy system. If your facility is located in an “Energy Community” your business may be entitled to additional tax credit bonus. Check the Energy Community Tax Credit Bonus Map.
The Resource Enhancement and Protection Program (REAP) can now be leveraged to offset the cost of installing commercial solar in Pennsylvania for eligible businesses. REAP was created in 2007 and amended in 2019. The Program is designed to enhance farm production and protect natural resources by enabling farmers, landowners, and businesses to earn Pennsylvania state income tax credits in exchange for implementing.
PPL, the Pennsylvania utility company, is offering grants to help businesses go solar. These grants can significantly reduce the cost of installing a solar energy system on your property.
You can now write off 100% of the depreciation in year one. This means that you can save even more on your taxes in the first year after installing a solar energy system.
Utility Rates Increase
According to EIA.gov, Over the last twenty years Pennsylvania utility rates have gradually increased year-over-year between 1 and 5 %. However, with so many businesses going solar over the last year, utility companies have had to drastically increase rates to recoup cost. Over the last year average rates spiked by 21%. PPL utility rates increased by 38%. The data shows, that businesses who do not switch to solar are essentially paying for that loss of business.
The Pennsylvania Solar Renewable Energy Program (SREC) has also made improvements. This program enables your organization to sell your excess energy back to the utility company, adding an additional revenue stream to your business.
While cash is always king, new renewable low-interest loan products are available with rates as low as 3%. You can re-amortize the loan every 6 months without penalty, and there is no penalty for paying off the loan early. These loans can help you finance the installation of a solar energy system without breaking the bank.
Commercial Property Assessed Clean Energy (C-PACE) has drastically changed the economics of installing solar for commercial property owners. C-PACE eliminates money down, increases liquidity, and removes dealer fees. C-PACE is a completely voluntary program. It allows commercial property owners to obtain financing for eligible projects, typically through private capital providers, and to repay the financing through a special assessment similar to a property tax assessment.
Nonprofits including faith-based organizations are perhaps the biggest beneficiaries of the new rule changes of the Inflation Reduction Act (IRA) that passed last August. As a nonprofit, there was previously no means for utilizing the tax benefits associated with owning solar electric generation systems. With the IRA, the IRS will now directly pay non-profit entities the amount of tax credit earned by solar electricity projects, the base amount of which will be 30%.
To receive a custom solar savings report with the latest up-to-date state and federal incentives, fill out TerraSol Energies’s commercial solar interest form. We generate a report as a complimentary service for all eligible businesses in the state of Pennsylvania.