Exploring commercial solar financing and government incentives can be a transformative step for businesses looking to invest in renewable energy. The combination of attractive tax credits and specialized financing solutions significantly lowers costs and enhances the feasibility of solar projects. Let’s dive into the various options available that can make solar energy not only accessible, but also financially beneficial for your commercial property.

Solar Lease:  

A solar lease is another popular option where your business pays a fixed monthly fee for a solar energy system installed by a third-party provider. This fee is usually lower than your current electricity bill, and the provider handles all system upkeep. Solar leases are particularly suitable for medium-sized commercial properties, such as retail stores or multi-tenant buildings, offering the benefits of solar energy without the need to purchase the system or manage maintenance.  

Solar Loans: 

A Commercial Solar PPA offers several benefits for businesses: 

• No Upfront Costs: The developer covers installation, equipment, and maintenance costs, allowing you to start saving on energy immediately without any initial investment. 

• Long-Term Hedge Against Inflation: Fixed energy rates provide price predictability, shielding your business from the volatility of utility rates. 

• Maintenance and Performance Monitoring: The developer handles all aspects of system operation and maintenance, ensuring optimal performance and efficiency. 

• Sustainability and Corporate Social Responsibility: Adopting solar energy reduces your carbon footprint and aligns with corporate social responsibility goals, boosting your brand’s reputation. 

• Flexibility and Scalability: PPAs can be scaled to meet your growing energy needs, making them an excellent choice for expanding businesses. 

• Enhanced Property Value: Solar installations increase property value and appeal to potential buyers or tenants, offering a significant return on investment. 

Title 17 Clean Energy Financing Program 

The Title 17 Clean Energy Financing Program provides loan guarantees designed to advance clean energy deployment and energy infrastructure reinvestment. This program offers flexible financing options across four key project categories: 

• Innovative Energy (Section 1703): Supports projects that deploy New or Significantly Improved Technology, which is technically proven but not yet widely commercialized in the U.S. 

• Innovative Supply Chain (Section 1703): Targets projects that incorporate New or Significantly Improved Technology in the manufacturing process for clean energy or production of such technologies. 

• State Energy Financing Institution (SEFI; Section 1703): Focuses on projects that deploy qualifying clean energy technologies with substantial financial backing or credit enhancements from state agencies or financing authorities. Unlike other categories, SEFI projects do not require the use of innovative technology. 

• Energy Infrastructure Reinvestment (EIR; Section 1706): Supports projects that retool, repower, re-purpose, or replace energy infrastructure, such as electric generation or transmission facilities, or fossil fuel-related production facilities. These projects aim to reduce emissions and are not required to employ innovative technology. 

Commercial Property Assessed Clean Energy (C-PACE): 

Property owners can fund energy, water, resilience, and public benefit projects via a voluntary assessment on their property tax bill. Commercial PACE (C-PACE) programs are the most common type in the U.S. and are the focus here.

Clean Energy Financing Toolkit for Decision Makers:  

This toolkit features profiles of around twelve solar financing incentives for clean energy, energy efficiency, renewable energy, sustainable transportation, and electrification.

• C-PACE is repaid through a property tax assessment, which remains with the property if it’s sold. 

• Long-Term Repayment: Terms align with the lifespan of improvements, ensuring energy savings cover annual repayments. 

• No Upfront Costs: Up to 100% of project costs are financed, eliminating the need for initial capital outlay. 

C-PACE could be an ideal solution for your organization if it:  

• Owns or occupies facilities within jurisdictions that offer C-PACE programs 

• Seeks long-term financing options (10+ years) with lower monthly payments 

• Prefers to start with pilot projects at select locations, before expanding more broadly 

• Plans to transfer financing obligations upon selling the property, rather than retaining ownership long-term 

• Aims to invest in durable improvements that enhance building resiliency and reliability 

For tailored support in comparing C-PACE against alternative financing choices, contact Solar Topps to explore solutions for your business needs. 

Arizona Commercial Solar Financing Incentives 

Arizona offers robust incentives to make solar energy more accessible and affordable for businesses: 

• Solar Equipment Sales Tax Exemption: Grants a full exemption for qualifying solar equipment, leading to substantial reductions in initial expenses. 

• Solar Energy Property Tax Exemption: Exempts the added value of solar installations from property taxes, maintaining lower tax bills. 

• Commercial/Industrial Solar Energy Tax Credit: 10% tax credit on installation, up to $25k per building a year, enhances financial viability.

• Net Billing: Earn credits for unused solar energy sent to the grid, offsetting your energy costs and enhancing savings. 

• Renewable Energy Production Tax Credit: Credits based on energy produced and sold, encouraging maximum output from your solar installation. 

Federal Solar Tax Credits for Arizona Commercial Property Owners 

Arizona businesses can also benefit from federal tax incentives, including: 

• Investment Tax Credit (ITC): Enables a 30% tax credit for solar system installations by 2032, greatly cutting installation expenses. 

• Production Tax Credit (PTC): Offers 2.75 cents per kWh for the first ten years of system operation, adjusted for inflation, providing long-term financial benefits. 

Leveraging MACRS to Lower Taxes for Solar System Installations 

The Modified Accelerated Cost Recovery System (MACRS) offers additional tax advantages: 

• How MACRS Works: Solar systems can be depreciated over a five-year schedule, with a 100% bonus depreciation available until the end of 2022. 

• Maximize Savings: By taking full advantage of MACRS, businesses can significantly reduce their tax burden, making solar installations even more cost-effective. 

Conclusion 

Solar Topps helps business owners navigate commercial solar financing and government incentives, making solar energy accessible and affordable. Tax breaks, credits, and creative financing like PPAs and C-PACE enhance the financial feasibility and long-term benefits of solar installations. Investing in solar not only leads to cost savings, but also contributes to sustainability and reduced carbon emissions. For more detailed information on how your business can benefit from these opportunities, visit SolarTopps.com/Commercial today.