Solar Incentives & Rebates for Businesses
The cost of solar has come down by more than 50 percent in the last few years, making solar a better investment than ever before. Join over 1,000 Oregon companies have decided to cut their energy costs and gain the solar competitive edge.
Commercial Energy Trust of Oregon Cash Rebate
The Energy Trust of Oregon (ETO) offers a generous incentive to business owners when installing a brand new solar power system. The maximum cash rebate you can receive is $40,000. This money goes directly to your business. In order to receive this solar incentive, you must be a customer of Portland General Electric (PGE) or Pacific Power. These incentives do decrease over time. That means by waiting, you have a high chance of receiving cash back than if you would have installed today.
PGE Incentive Rate
$200 - $500 per Kilowatt
Up to $40,000
Pacific Power Incentive Rate
$250 - $350 per Kilowatt
Up to $25,000
The solar installer must be a certified Solar Trade Ally by the Energy Trust of Oregon.
All solar equipment must be new and UL listed.
Verification from Energy Trust tax technicians.
Federal Solar Investment Tax Credit (ITC)
The solar investment tax credit will directly reduce or "credit" your federal taxes, wiping out any tax liability that you have on a dollar-to-dollar basis. This incentive is a credit to your tax return worth 30% of the total cost of your solar electric system and can be used within 5 years from the date of installation. As with any tax benefit, we recommended working with your tax account to achieve the best possible result.
Example Using the Federal Solar Tax Credit
When you spend $50,000, you will receive 30% back in federal tax credits totaling $15,000.
MACRS Accelerated Depreciation
Depreciation is the loss of value that occurs over time with the item your business purchased for a specific use. As a business owner, you are eligible to deduct this “loss in value” from your taxable income when used for your business. 85% of total solar installation costs are eligible for depreciation. This can add a tremendous amount of financial value to your system. Our example tables below use a project cost of $100,000. You can learn more about MACRS on a more full article located here.
MACRS 50% Bonus Depreciation
In the first year claiming the 50% Bonus Depreciation, the basis is reduced by half or 50% from $85,000 to $42,500 before applying the normal MACRS depreciation rate. In Year One, you will gain an addition $8,500 in depreciation ($42,500 x 20% = $8,500). After year one, you will continue to apply MACRS rates to the remaining half of the basis ($42,500 x 32% =$136,000 and so on…)
Rural Energy for America Program (REAP)
The United States Department of Agriculture (USDA) provides grant funding to agriculture producers and rural small businesses for solar electric systems. The popular Rural Energy for America Program solar grant, or better known as USDA REAP Grant cover 25% of the total cost of going solar with grants from the United States Department of Agriculture.
Agricultural producers and rural small businesses are eligible to receive up to $20,000 in grant money through their Rural Energy for America Power Program (REAP).
Who May Apply?
Agricultural producers with at least 50% of gross income coming from agricultural operations
Businesses in eligible rural areas
Agriculture producers may be in rural or non-rural areas
Keep in mind, that “small” is defined by the SBA depending on your NAICS code, and can appear quite “large.”
At Sunbridge, we in-house writing the grant to ensure you have the best possible opportunity to be awarded. We work diligently to secure business grant funding for many projects in a competitive system.
Net Energy Metering for Business
Net Energy Metering is how business owners receive compensation for producing excess clean solar energy to the utility grid. Your utility must keep a “running tab” on how much solar energy you generate. When you produce more power than you are currently consuming, you will be compensated with energy credits equal to the retail rate of a kilowatt-hour. Any extra energy credits that you save up must be carried forward to the next month’s bill for a full year.
Each credit is worth equal the market rate which is the price you pay for electricity. This means that you can collect energy credits you create in the summer when the sun is shining most of the time, then use it in the winter when it isn’t so shiny. This is effectively “free energy storage.”
EXAMPLE OF NET ENERGY METERING
You generate 10,000 kilowatt-hours of solar power. You consume 6,500 kilowatt-hours of utility energy. Therefore, you net 3,500 energy credits.