The US solar market is experiencing rapid growth, with many commercial facilities committing to a renewable or carbon-neutral future. The Inflation Reduction Act (IRA) offers tax incentives that can fund eligible solar projects over the next decade, potentially returning 30% to 60% of the project costs. This growth is bolstered by the decline in manufacturing costs for solar photovoltaic (PV) cells and the recovery of commercial solar installations from past supply-chain disruptions. However, the window for taking advantage of these incentives is narrowing, making it essential to begin planning solar projects now.

How On-Site Solar Helps Businesses

On-site solar energy offers numerous benefits for businesses, including reduced utility costs, accelerated timelines for achieving net zero emissions, and support for regulatory compliance. Additionally, businesses can leverage tax credits and incentives to offset installation costs. These benefits are particularly attractive to real estate owners, operators, and investors who seek to enhance the sustainability and economic stability of their properties.

Solar Analysis and Financial Impact

Before embarking on a solar project, it is crucial to conduct a thorough solar analysis. An independent assessment can help determine the financial impacts of investments in on-site solar generation. According to a survey, 93% of commercial and industrial leaders expressed a need for assistance in identifying these financial impacts.

This analysis should consider variables such as available rooftop space, tenant energy needs, and current electricity prices. Understanding the tax incentives available and how they align with the organizational structure is also vital. An objective analysis focused on carbon emissions reduction and optimal financial outcomes can guide businesses in making informed decisions about their solar investments.

Implementation of On-Site Solar Plans

Implementing an on-site solar energy plan can significantly impact a business’s bottom line by reducing energy costs and increasing property value. Here are some key steps for successful implementation:

1. Create a Roadmap: Develop a tailored implementation strategy that aligns with your business needs. Use advanced modeling tools to focus on your goals.
2. Understand Tax Advantages: Continuously evaluate the solar system and qualify for tax incentives that suit your specific circumstances.
3. Focus on Specific Business Needs: Conduct a detailed analysis to avoid conflicts and select the right installers, ensuring the strategy complements your organization’s interests.
4. Stay Updated on Changes: Keep abreast of new services and infrastructure that can benefit your solar strategy.

Key Considerations for On-Site Solar

1. Improve Results: Investment in on-site solar arrays can enhance energy efficiency and lower costs across various real estate sectors, including commercial, industrial, and multi-family residential. Benefits include reduced emissions, increased property value, and eligibility for federal, state, and local tax incentives. According to PwC’s 2023 US Large Energy User Survey, nearly half of commercial and industrial leaders anticipate an increase in on-site energy generation or battery storage over the next two years.
2. Watch Dates and New Rules: The timing of your solar project can affect the availability of incentives. The Inflation Reduction Act has extended federal tax incentives for solar, providing opportunities even for companies without taxable income. Understanding the expiration dates of these incentives and aligning them with your project timeline is crucial. State and local incentives also play a significant role, especially in states with progressive emissions reduction plans.
3. Compliance with Regulations: Businesses with properties in states like New York, Illinois, Colorado, and California need to stay compliant with evolving sustainability efforts and guidelines. Retrofits may be necessary to meet these requirements over the next decade.

Investing in commercial solar power is a popular choice for businesses aiming to reduce energy costs, enhance property value, and demonstrate environmental stewardship. With the US solar market growing and significant incentives available, now is the time for commercial facilities to embrace on-site solar energy. By conducting thorough analyses and staying informed about regulatory changes, businesses can successfully implement solar projects that contribute to a sustainable and economically stable future.

Click here to read the full article, originally published August 7, 2023, by PWC.