Thinking about making the switch to solar for your business? 2021 just might be the best time.
Is 2021 a Good Year to Convert My Business to Solar?
Whether your business is a small building filled with a few employees or a warehouse full of large equipment and energy-draining operations, making the switch to solar is advantageous. Why? To put it simply, every business needs electricity to run in some way or another. As utility costs continue to increase, your business gets more expensive to run. However, when you make the switch to solar, you cut down on costly overhead expenses and are left with the opportunity to reinvest that money into more useful areas of your business.
When it comes to saving on a Coachella Valley commercial solar installation, it’s crucial to learn about the federal solar tax credit (commonly referred to as the solar investment tax credit). This type of tax credit allows for businesses to decrease federal tax liability by a percentage of installation expenses. In most cases, this means significant savings for commercial solar installations!
What is the Federal Solar Tax Credit and Why Should It Matter to My Business?
Although the federal solar tax credit was once worth 30% of install expenses, due to the step-down nature of this tax credit, the investment tax credit was decreased to 26%. Again, due to the step-down nature, the tax credit is expected to drop yet again. In fact, by 2024, the federal solar tax credit is expected to be locked in at 10% indefinitely.
For this reason, business owners who find themselves deliberating between making the switch to solar should consider installation sooner rather than later. Switching to solar now means a better percentage for a longer period of time which can also mean a shortened payback period and increased Return-On-Investment.
Bonus! The Tax Reform Bill modifies bonus depreciation to allow 100% expensing for property placed in service after September 27, 2017, and before January 1, 2023. By increasing bonus depreciation to 100 percent, the new tax bill essentially allows eligible entities to deduct the entire allowable tax basis of the system in the first year of operation. Under the federal Modified Cost Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. MACRS establishes a lifespan for various types of property over which the property may be depreciated. For PV systems, the taxable basis of the equipment must be reduced by 50% of any federal tax credits associated with the system.
Thinking Green (and We Aren’t Talking Cash This Time)
While saving money on costly utility bills is, perhaps, the most beneficial quality of switching to solar for your business, the green effects of solar are equally as important—but to the world as a whole. As more people and more businesses switch to solar energy, our reliance on fossil fuels decreases—making our world a healthier, happier place. Plus, what’s more reputable than being a green business?
Let our Coachella Valley Commercial Solar Team Increase Your Profit Margin!
If you’re ready to make your business a green one, it’s time to get in touch with our Coachella Valley commercial solar experts at Renova Energy!
Call Renova Energy today and let us provide you with a FREE consultation!