Massachusetts business owners all over the state are starting to see the benefits of using their roofs and unused property for installing solar panels to make a positive impact on their bottom line! From reducing utility costs to generating actual income, here is what you should know about how you can benefit from making a sound investment with solar energy.
SMART Incentives to Generate Income
Replacing the former Solar Renewable Energy Credits, the Solar Massachusetts Renewable Target program, or SMART, pays a monthly utility incentive to homeowners and business owners that invest in their own solar energy systems, based on a declining rate in available MW capacity blocks. The earlier you get into the game, the more money your solar panels will qualify for from your utility. For example, SMART is still accepting projects larger than 25kW for commercial businesses that are customers of Eversource MA East in the first 4 of 8 incentive blocks, meaning commercial businesses would receive a higher rate payment.
Even in a time of economic crisis, like in the wake of the global COVID-19 pandemic, SMART incentives will still payout as a monthly income for up to 10 to 20 years depending on your system size!
Net Metering to Offset Energy Costs
Often times, solar panels will generate more electricity than a commercial building can use. This excess energy is diverted back into the electric grid for use in other businesses and homes, in exchange for a credit on your energy bill. This is called net metering, and reduces the overall energy costs for your property.
With the income generated from SMART and net metering credits offsetting electricity bills, your utility is essentially paying you for energy your commercial solar energy system is generating.
Federal Tax Incentives to Reduce Net Costs
Solar Tax Credit Saves 26% in 2020
The Federal Investment Tax Credit, also known as the ITC, is still available for commercial solar PV (photovoltaic) systems. This solar tax credit provides a 26% reduction of the total solar installation costs from your tax liability.
After this year, the solar tax credit drops to 22%, and after 2021 it will remain at just 10% for commercial systems. The earlier you can install solar panels, the more you stand to make on your system’s net costs!
MACRS Depreciation to Speed Up ROI
When it comes to the Modified Accelerated Cost Recovery System (MARCS) depreciation for commercial solar, your business can speed up the solar payback period through the depreciation’s 5-year cost recovery, which is equivalent to about 25% of the project costs.
When you combine the savings from the ITC and MARCS, you get to use tax credit money you would have paid to invest in your solar energy system.
Shorter Payback Periods = Greater Profitability
Even for those that employ commercial solar financing to help pay for their installation, a solar loan that is spread out over 10 years or longer often has a positive monthly cash flow. Since payback periods for commercial solar PV systems are lower than residential periods averaging between 4-6 years, you can start to see the financial benefits almost immediately over the 25+ years your solar panels are designed to last.
A Bump In Your Real Estate Value
Because of all of these reasons we’ve already listed, installing solar is like having a revenue generating virtual tenant on your property. The Net Present Value (NPV), or how solar adds value to your business over its 25-year lifespan, increases the real estate value of your property immediately upon solar installation.
Making Solar a Sound Investment
Boston Solar is trusted as the number one Massachusetts based solar installer, and we have been able to see a consistent internal rate of return between 15% and 35% for commercial systems. So when you are looking for a commercial solar installer in Massachusetts that specializes in properly sizing, optimizing and installing systems for all kinds of commercial properties and businesses, we are your trusted partner.
We can help you to position your new system to maximize on the available incentives, pair you with the right financing, and design your system so that it is customized to the needs of your business throughout Beverly, Danvers, Framingham, Franklin, Marlborough, Natick, Milford, Greater Boston Area, Plymouth, Weymouth, Braintree, Springfield, MA and across the whole Bay state.
Have you been needing to install a new roof? Now is the time to install solar! Combining your building improvement projects can make it easier to obtain flexible financing options, and you can utilize some of the tax benefits to offset part of your new roof costs. Whatever your commercial solar needs, Boston Solar is here to help — so schedule a free (virtual) solar consultation today!
What if you could turn solar energy into a revenue generating investment for your business? Just ask Boston Solar! Get a free solar quote by calling 617-858-1645 or get in touch here.