What Does the Solar Tax Credit Mean for Commercial Solar?

The solar tax credit offers significant savings on commercial solar installations and is one of the best solar incentives available today. Also known as the Investment Tax Credit or ITC, this incentive allows businesses to reduce their federal tax liability by 30% of the total cost of installing solar panels, batteries, and more. 

Premo Solar is a premium commercial solar installer serving Monterey Bay. We stay up to date on the best commercial solar incentives to help our clients get the best deal and return on their investment in solar. Here’s everything we know about claiming the solar tax credit for commercial solar projects in 2024.

How the Solar Tax Credit Works for Commercial Solar 

The solar tax credit works as a dollar-for-dollar reduction of the amount of taxes that your business owes. To be eligible for the ITC, you must install new or limited previously owned solar equipment for a business that’s located within the United States or its territories. While the standard tax credit covers 30% of the total cost of solar panel installation, businesses can get an even higher percentage by meeting various criteria, like utilizing domestic equipment, sitting in an energy community, or being located in certain low-income areas.

Even nonprofits can claim the solar tax credit through a direct pay option made exclusively available to tax-exempt organizations. Schools, houses of worship, and other nonprofits will receive a payment that covers 30% of the total cost of their solar installation.

Almost all costs associated with a commercial solar installation are eligible for the solar tax credit. 

• Solar panels & inverters
• Racking equipment 
• Sales tax on solar equipment 
• Labor costs 
• Solar battery backup (with a minimum 5-kilowatt hours capacity)
• And more 

Other California Commercial Solar Incentives in 2024

In addition to the solar tax credit, there are several other commercial solar incentives available in 2024:

• Production Tax Credit (PTC) – The production tax credit is based on the amount of electricity your solar energy system produces. In most cases, businesses cannot claim both the ITC and PTC on the same equipment. 
• MACRS Depreciation – Commercial solar installations are eligible for a 5-year cost recovery period. 
• Net Metering – Businesses can trade solar energy with their utility company in exchange for a credit on their electric bills. 

Maximize Your Savings on Commercial Solar Installation with Premo Solar

As a leader in the solar industry throughout the Monterey, Santa Cruz, Salinas, Carmel, and the surrounding areas, Premo Solar can make your switch to renewable energy a simple, streamlined process. Our team will handle everything for you, from permitting to the final inspection, all with a 100% satisfaction guarantee. Going solar with your business can help stabilize your operating costs, boost your public image, and more. What are you waiting for? Get started today. 

Schedule your commercial solar consultation. Call 831-901-3352 or contact us for more information.