Federal, state and local governments offer incredible financial incentives to encourage businesses to invest in renewable energy. These incentives dramatically lower the cost of a solar system and can make the difference in turning your project into a profitable investment.

State and Local Rebate Programs

Many states, cities and utility companies have created programs to encourage businesses to switch to solar power. The amount of the rebate subsidy varies by program, but some are generous enough to cover up to 40% of your system cost. However, these programs are designed to reward early adopters of solar power, so the rebate amount per project continues to drop as the allotted funds are consumed. ARE will identify all of the qualifying programs for your business and file the required paperwork for you.

Federal Tax Credits

The federal government offers a number of solar incentives, including a 30% investment tax credit (ITC) on the solar system cost.

SRECs

In New Jersey, the state rewards businesses that have solar installations with Solar Renewable Energy Certificates (SRECs) for producing green energy.  For every 1,000 kWh that you generate from your solar installation, you earn one SREC.  At the same time, the Board of Public Utilities is charging utility companies for the non-renewable energy they produce up to a percentage.  Utilities have to option of investing in their own renewable energy facilities or they can buy SRECs from other solar installations, such as the one in your business.

For utilities to buy these SRECs, they are traded in the open market and have been traded on the spot market for approximately $700 as of April 2010. A business with a solar system can use SRECs as a revenue stream to earn returns on their investment, or they can surrender their SRECs for 15 years to pay back a loan to finance their system.

To find the latest SREC market values, go to: www.njcep.com .

Accelerated Depreciation

Another federal incentive available to businesses is the accelerated depreciation of the solar asset that follows the Modified Accelerated Cost Recovery System (MACRS) technique.  This accelerated depreciation is a five year MACRS spread over 6 years where more than 50% of the asset is depreciated in the first two years.