|Bellingham's Wood Stone Manufacturing Solar Panel Installation|
A business in Washington may benefit from adding a solar system in many of the same ways that a home-owner benefits, plus there are additional federal tax benefits for a business.
The primary difference between home solar and solar for a business is size, scale and possibly complexity of the wiring. In general, a business uses more electricity and has more roof space available thus the solar system is larger.
When planning for solar, the first question is how much electricity is needed? A business should first reduce its usage of electricity by making cost-effective energy efficiency improvements. The Northwest Energy Efficiency Council is an excellent resource for finding ways to reduce electrical consumption through efficiency as is your local utility.
|UW Seattle Mercer Dormitory Solar Project|
The next question is how much electricity can your site produce? The online calculator PVWatts can be used to begin to answer this and the solar site evaluation from an installer will yield a more site specific calculation. How much electricity your rooftop can generate is affected by the direction it faces, the pitch, and the amount of sunny space available.
The cost of going solar today is lower today than it ever has been. The price presented to you will vary based upon the solar equipment and the complexity of the installation. Racking for solar on a flat roof is usually higher than it would be for a roof that is tilted.
Solar Incentives for WA Businesses
Federal Income Tax Credit
- 30% of the total cost of the solar system comes back as a tax credit based upon the year the system becomes operational when installed between now and 12-31-2019. The percentage is reduced for solar installed after 2019.
- Can be carried forward if the credit exceeds tax liability for the year.
- Requires that the business owes sufficient taxes that it can use these benefits.
MACRS Accelerated Depreciation on Federal Income Taxes
Businesses may depreciate 85% of the cost of a solar electric system following the five-year Modified Accelerated Cost Recovery System (MACRS). The five-year depreciation schedule can be found in the most recent version of IRS Publication 946.
Sales Tax Refund
Sales tax must be paid upfront on solar systems of size 10 KW up to 100 KW. The owner may then apply to the State Department of Revenue (DOR) for a refund of 75% of the sales tax amount. This refund does not apply after December 31, 2019.
Washington Production Incentive
The same parameters apply to a business as to a home:
- Maximum of $5000/year based upon the KWH of electricity produced and measured on a Production Meter.
- Business must own the property and the utility account name must match the property owner’s name.
- Rate at which the incentive is paid is based upon whether or not the solar components are made inside or outside of Washington.
- When more power is generated than the business needs at that moment, the excess power is credited to the business utility account to be used to reduce later bills; account zeroes out once a year on April 30 and a new year starts.
- If a utility bills on a tiered rate system, solar can reduce the higher costs electricity.
- Because solar for a business can be of a much larger scale than for a home, it is important to work closely with your utility from the outset as the utility may need to make local improvements such as a new transformer to be able to handle the added local power.
Because these incentives have expiration dates or are reduced in future years, now is the best time for a business to investigate what solar electricity can do for it.