Adding solar energy to your Cape Cod or Southeastern MA business is good for the environment, helping your company reduce its carbon footprint and greenhouse gas emissions while using electricity from a clean, renewable source: the sun.
“Going green” isn’t the only benefit of commercial solar installation, however-the energy savings alone make it worthwhile for businesses to go solar! But while many businesses are enticed by the prospect of 25+ years of free energy, they’re also worried about upfront costs and concerned about tying up cash in a long solar payback period before they see the real financial benefits of going solar.
So today, we’re going to talk about what you can expect from your commercial solar ROI, why commercial solar panels are worth it, and ways that you can maximize your solar savings.
What’s the Average Payback Period for Commercial Solar?
Because Massachusetts is such a lucrative state for solar incentives, our solar payback period is shorter than it is in other states. The exact payback period for a specific commercial solar installation will vary due to factors including facility size, geographic location, amount of lighting, climate control or other power-intensive amenities, and onsite management. But many businesses are able to break even on solar within 3 to 6 years through energy savings and their ability to monetize their tax benefits.
Because solar panels last 25+ years, that means that your business will be benefiting from completely free solar energy for an average of two decades or longer!
Using Solar Incentives to Improve Your Return on Investment
What are some of the solar incentives in Massachusetts that reduce upfront costs and provide ongoing savings once your business’s solar panels are installed? Here are a few:
The Federal Solar Tax Credit (Investment Tax Credit or ITC)
Recently overhauled by the Inflation Reduction Act, the solar ITC or solar tax credit is one of the most well-known solar incentives, now offering a federal tax credit equal to 30% of total solar installation costs. For commercial solar installation, this could easily equal thousands of dollars in savings, lowering your payback period and increasing your solar ROI.
Solar Massachusetts Renewable Target (SMART) Program
Massachusetts’ SMART program is another great solar incentive, and it’s only available to Bay Staters! Under this program, you’re paid a fixed monthly rate based on how much power your panels generate. Your rate is determined by how soon you enroll (the longer you wait, the lower the rate), so if you’re interested in maximizing your solar savings, act now.
Net metering is an incentive many people are familiar with, but not every state has it. With net metering, Massachusetts businesses (and homeowners, too!) can send excess electricity produced by their panels back to the grid in exchange for a utility credit they can use to offset future energy bills.
State & Federal (MACRS) Depreciation for Commercial Solar
Modified Accelerated Cost Recovery System (or MACRS) sounds like a phrase that only an accountant would love, but actually, companies with solar panels love it, too! MACRS is a tax law that makes it easier for your business to quickly recover the costs of going solar. Bonus depreciation is also available at the Federal level consult your tax advisor on how this may apply to your business or individual situation.
Other Ways to Maximize Your Solar Benefits with My Generation Energy
Incentives aren’t the only way to improve ROI and get more out of your solar panels. We don’t recommend solar leasing for residential solar installation, but for some businesses, commercial solar leases are a great way to earn extra cash, especially if you have a lot of unused roof space.
But the number one thing you should do if you’re thinking about adding solar energy to your business is make sure you work with a qualified professional commercial solar installer near you like My Generation Energy. You have a lot of options when it comes to solar providers near you in Eastern Massachusetts, but none offer better design and installation services than we do, ensuring your solar panels produce at their maximum potential so that solar power helps your business for decades to come.