Federal Investment Tax Credit – 30%
This aspect is perhaps the most well-known. The Federal Solar Investment Tax Credit (ITC) and 5-Year Modified Accelerated Cost Recovery System (MACRS) have been important drivers in reducing costs for companies going solar. Many other rebates and incentives exist for state, municipal, and utility levels. You can find out more about specific locations by searching the Database of State Incentives for Renewables & Energy.

California Incentives
Net Energy Metering Aggregation (NEMA) and Net Energy Metering Virtual (NEMV) were approved by the California Public Utility Commission in 2014, allowing businesses to install a single centralized solar power system to offset multiple meters or facilities. Benefitting meters can be on different rates or even located on different properties, but they must be on contiguous parcels. Net metering (the ability to sell energy to the utility) can also be central to creating positive financial returns. That being said, be aware, that after years of back and forth, the California Public Utilities Commission (CPUC) voted unanimously on December 15, 2022, to approve California’s third iteration of net metering, or NEM 3.0. This will significantly reduce net metering compensation rates for new California solar customers (by about 75 percent).  Read more in our blog. 

Rate Structure Incentives
While most companies have heard of net metering, perhaps one of the least talked about, but extremely important topics are the role of rate structures. When possible, having the ability to rate-switch to the best utility rate structure is extremely helpful in creating a winning financial scenario.

Increase Property Value
Having a commercial solar energy system on your property is known as a capital improvement which adds to your property’s value. This means that you can potentially sell your business faster and for more than a business without solar. Your investment in efficient, clean solar power also adds to the tax basis of your business. If you sell, this tax basis investment can be deducted from the sale’s price, reducing the amount of the price that is counted as profit. This reduces the taxes taken from the sale and may be able to help you avoid capital gains taxes on the appreciation.

Get A Big Impact for Zero Down
At Clean Energy Funding Solutions, we do not have “a horse in the race” with regard to how you finance your solar project, but we have trusted finance partners that we can introduce you to. The most common ways that our customers have financed their projects are below. As one of California’s most reputable commercial solar matchmakers, our team is dedicated to helping customers get the power they need at a price they can afford. We’ll also ensure that you receive all available benefits for federal and state tax credits, as well as other solar incentives.

Cash System
If you have the financial resources available, purchasing your commercial solar system delivers the greatest long-term savings and return on investment. From 2022-2032, you may be able to recover up to 30%* of your system cost through tax incentives. Your energy savings will pay for the system in a few short years, with decades of free electricity to follow.

• Claim tax incentives
• Your system will pay for itself with savings on your utility bills
• Increase your property value

Property Assessed Clean Energy (PACE)
The property-assessed clean energy (PACE) model is an innovative mechanism for financing energy efficiency and renewable energy improvements on private property.

• Payment comes as a line item on your bi-annual property tax bill
• The interest portion of your payment may be tax deductible
• It is an “off-balance sheet” payment
• Customers can monetize tax benefit

Power Purchase Agreement (PPA)
Do you want low-priced solar power but don’t want to own or maintain the equipment? With a PPA, a third party owns, maintains, and repairs the solar power system for 15-25 years, and you simply agree to buy a guaranteed amount of electricity for significantly less than from the utility company. You pay nothing out-of-pocket, never have to worry about the system and start saving immediately.

• No out-of-pocket or ownership costs
• Low price cost per kWh
• PPA provider claims tax incentives
• 20-year production guarantee
• Low payments & immediate savings
• System Size > 100kW

Capital Lease
Capital Leases are similar to loans. You can capitalize on all tax and depreciation benefits that come with solar. Monthly payments are typically higher than an operating lease option because the buyout at the end of the term is usually just $1.

• No up-front costs
• Fixed monthly payment
• Terms from 5 – 15 years
• Your business receives the tax benefits like the Federal Investment Tax Credit (ITC)
• Your business receives the state incentives like SRECs
• Your business receives the electricity savings
• Equipment is capitalized as an asset on your balance sheet
• Depreciate the system to reduce taxable income
• Buy-out at the end of the lease term is usually $1

Operating Lease
With an Operating lease for a commercial solar system, a financing company purchases the solar system from the solar company and then leases it to the commercial customer. The lessor receives tax benefits, including depreciation and the Federal Investment Tax Credit (ITC).

• No upfront costs
• Simple monthly payments, usually fixed
• Terms from 6 – 10 years
• Buy-out at the end of the lease term is usually the fair market value
• Your business receives the electricity savings
• Your business may receive the state incentives
• Leasing company receives the federal and state tax benefits
• Preserves existing lines of credit
• A great way to finance solar when your business can’t use the depreciation or the ITC

The Best Solar Technology
Our expert engineers and designers will help you identify the best location for panels – solar can be installed on your roof, over your parking lots, or on vacant land. We work with the top manufacturers to ensure you get the best ROI for your unique needs. Below are just some of the many solutions we can offer, plus many more!