Solar Incentives & Regulations for Installation: What Businesses Need To Know

As a business owner, you’re always looking for ways to cut down your overhead costs. After all, you don’t have an unlimited budget and you want to spend money on the things that matter. That’s why more and more business owners are turning to solar energy for their buildings.

Even if you don’t install full solar panels, solar-powered upgrades can provide significant savings on more than your energy bill! Many states and even the federal government offer incentives for business owners willing to invest in clean, renewable energy, and you need to be aware of both these solar incentives & regulations for installation.

Why Businesses Are Turning to Solar Energy

There are a lot of great reasons for businesses to turn to solar energy. One of the most appealing is that solar is a relatively easy way to meet your business’s energy needs and sustainability goals. Embracing solar power allows companies to significantly reduce their carbon footprint, aligning with global sustainability efforts and meeting corporate social responsibility objectives.

The financial impact of solar investment is also a major solar incentive. While the initial investment in solar infrastructure can be considerable, the reduction in monthly energy expenses often leads to a favorable return on investment over time. Depending on how much energy you’re able to generate, a solar system can save many $1,000s over the course of its lifetime. As energy prices rise, this number may also increase. 

What’s more, investing in solar energy doesn’t just save you money; sustainability is a major driver for business. 80% of American consumers say they’re willing to pay an average of 9.7% more for sustainability and 88% of US and UK consumers say they strongly value brands that can help them be more environmentally friendly. The numbers are clear: Sustainability isn’t just good for the environment, it’s good for business. 

Overview of Solar Incentives

To encourage the adoption of renewable energy, various incentives are available at federal, state, and local levels. These programs are designed to offset installation costs and make solar energy more accessible for businesses.

Federal Incentives

One of the biggest incentives for businesses to install solar is the Investment Tax Credit, or ITC. The ITC can save you 30% on the cost of your solar system! To qualify, your business must fall into the commercial, industrial, or agricultural sector, and you must purchase the solar system, not lease it. Your business must also pay federal income taxes and must be located within the USA or its outlying territories. 

Another major business incentive is the Modified Accelerated Cost Recovery System (MACRS).  This depreciation benefit permits businesses to recover investments in solar equipment through accelerated depreciation deductions. Under MACRS, the capital cost of solar energy systems can be depreciated over a five-year period, providing extra tax relief in the early years of the system’s operation.

State and Local Incentives

State solar incentives & regulations for installation vary widely, so make sure to check the rules for your specific state. Let’s take a look at the three states that produce the most solar energy: California, Texas, and Florida.

• In California, the Net Energy Metering (NEM) program allows businesses to receive credits on their utility bills for surplus energy generated by their solar systems. Local utilities will also offer additional incentives.
• In Texas, several local utilities offer incentives, and Texas offers a 100% property tax exemption for the added value of solar installations, reducing the long-term financial impact.
• Florida offers a Solar and CHP Sales Tax Exemption, allowing businesses to save on the purchase of solar energy systems. The state also has a Property Tax Abatement for Renewable Energy Property, so that the added value from a solar installation doesn’t increase property taxes.

For a comprehensive and up-to-date list of incentives by state, businesses can consult the Database of State Incentives for Renewables & Efficiency. Even outside of these states, many states and local utilities offer net metering. Net metering is a billing arrangement that allows businesses with solar energy systems to send excess electricity back to the grid in exchange for credits on their utility bills. This helps offset the cost of electricity drawn from the grid when solar production is low, such as at night or during cloudy periods.

Grants and Loans for Solar Projects

Beyond tax incentives, various grant and loan programs are available to support businesses in financing solar installations: Programs like the Rural Energy for America Program (REAP) offer grants to small businesses in rural areas for renewable energy projects, covering a portion of the installation costs.

State grants are also available and may be a great idea for your business to take advantage of. For example, Maryland has a program that provides financial assistance to businesses installing solar panels coupled with electric vehicle charging stations. This provides an extra incentive for your employees or visitors (electric car charging) and saves you money.

Finally, low-interest loan programs are available at both federal and state levels to help businesses finance solar projects. These loans often come with favorable terms, making the transition to solar more financially feasible.

Regulations Businesses Need To Consider

While the incentives are attractive, you do need to navigate the regulatory landscape effectively to ensure a smooth installation and operation of your solar energy system.

Permitting and Zoning Requirements

Local building codes and zoning laws play a significant role in solar installations. Businesses must obtain the necessary permits before installation, which may involve inspections and adherence to specific design standards. Zoning restrictions can affect the placement and size of the system allowed. 

Interconnection Agreements

To connect a solar energy system to the public utility grid, businesses typically need to enter into an interconnection agreement with their utility provider. This agreement outlines the terms and conditions for the safe and energy efficient integration of the solar system with the electric grid, including technical specifications and liability considerations. You need to check with your local utility to understand how to get the most out of your solar investment, as every utility company will have different standards!

Compliance With Renewable Energy Standards (RES)

Many states have established Renewable Portfolio Standards (RPS) that require a certain percentage of energy to come from renewable sources. Businesses generating their own renewable energy may have opportunities to participate in related programs, such as selling renewable energy credits (RECs).

Because each state has separate regulations, what works for a business in Texas won’t be the same as a business in Illinois. Read about your state’s RES and RPS standards to find out specifically what’s required in your area.

Steps for Maximizing Incentives and Ensuring Compliance

To take full advantage of available incentives and ensure compliance with regulations, businesses should follow a strategic approach when transitioning to solar energy. Conducting a solar feasibility assessment is the first step, as it helps determine the financial and technical viability of a solar installation based on energy needs, location, and system size. 

Consulting with local authorities and utility companies early in the process ensures that all necessary permits, zoning requirements, and interconnection agreements are addressed before installation begins. Working with experienced solar installation companies can simplify the process, as reputable providers understand incentive programs, regulatory requirements, and best practices for maximizing energy efficiency. 

Finally, staying updated on policy changes is essential, as government incentives and regulations evolve over time. Keeping track of new developments allows businesses to adapt and continue benefiting from financial incentives while remaining compliant with legal requirements.

How Remington Solar Can Help

Here at Remington Solar, we know just how important access to solar technology is for businesses. In addition to manufacturing durable, reliable solar products and accessories, we also provide support to businesses looking to invest in solar energy. 

We’re intimately familiar with solar incentives & regulations, and our solar experts are trusted by household names like Google, Amazon, Home Depot, and Costco, among others. If your business needs support with adopting solar, give us a call at (888) 978-2578, or email us at support@remingtonsolar.com. Our help center is also available 24/7.

Ready To Explore More Solar Incentives & Regulations for Installation?

There’s never been a better time to invest in solar energy for your business. Between saving on energy costs and increasing your customers’ confidence in your company, as well as earning money through rebate programs and tax credits, solar energy is a smart choice for many businesses, no matter the size – whether you get a 40-watt solar fan or a different Remington Solar product. However, it’s vital that you understand your local solar incentives & regulations for installation. 

If you’re ready to get started or curious and want more information, don’t hesitate to reach out to us at Remington Solar. We’d love to help you learn how to maximize your solar investment!