Solar for Businesses & Nonprofits
Solar Panel Grants & Incentives
2023 is a big year for solar incentives! Since the passing of the Inflation Reduction Act, there are a number of financial incentives that businesses and nonprofits in North Carolina can take advantage of when they go solar. Keep reading to see what solar incentives businesses can count on, and what other grants are available to increase your solar savings potential.
Upfront Tax Disclaimer
We are not tax professionals (surprise!) and this post does not constitute professional tax advice or guidance. If you end up going on your solar journey with us, we can connect you with Lucas Tax and Energy, a CPA specializing in energy related tax issues, that we keep on retainer as a service to our customers.
2023 Solar Incentives You Can Count On
30% Federal Solar Tax Credit
Commercial Businesses (with Tax Liability)
The Inflation Reduction Act of 2022 reestablished the Federal Tax Credit incentive for businesses (and homes) that install a solar system, offering a tax credit worth 30% of the system’s cost. This incentive is set to stay at this rate until 2032, without a cap on the value of the system that can be claimed.
For instance, a business installing an average 100kW solar system costing $205,000 could claim a tax credit of $61,500 when filing their 2023 taxes, effectively reducing the net system cost to $143,500. The Federal Solar Tax Credit covers a wide range of solar costs, including solar panels, mounting equipment, inverters, battery storage, system wiring, installation labor, and associated taxes.
30% Direct Pay Reimbursement
Tax-Exempt & Nonprofit Organizations
The signing of the Inflation Reduction Act brings big news for nonprofits & tax-exempt organizations – a new 30% Direct Pay Reimbursement! This means that eligible tax-exempt and nonprofit organizations can apply to receive an “elective pay” refund worth 30% of the cost of the solar project. A full list of eligible organizations and an overview of the application process can be found here.
Accelerated Bonus Depreciation
Commercial Businesses
Most assets are depreciated over a long period of time, but commercial solar systems are eligible for accelerated depreciation in the first year. This gives businesses owners the benefit of additional tax savings. Depreciation value depends on the business’ effective tax rate and can range from 20-35% off the cost of the system in the first year.
Ready to Get Started?
Request a free assessment to learn more and get a custom proposal for your business, nonprofit, or tax-exempt organization.
Other (Cherry On Top) Solar Incentives
USDA REAP Grant
Farms & Rural Businesses
The USDA REAP program provides grant funding to farms and rural businesses for solar energy systems to help permanently reduce operating expenses. When combined with other incentives, eligible farms & businesses can save 70-90% on the cost of solar with a REAP Grant.
To be eligible for this incentive you must:
- Be in a rural area as defined by the USDA
- Be classified as a small business by the US Small Business Administration
Tax Credit Adders
The following are a few adders your business may be eligible for. Again, make sure to consult a tax advisor for up-to-date info and to confirm your eligibility.
+ 10% bonus for domestic material/equipment
- 100% US Steel (which usually makes up the racking for the solar system)
- 40% of the extra equipment (such as the modules, inverters, optimizers) must include material from US sources
- More info to come!
+ 10% bonus for a project located in an energy community
- This may include an application process
+ 10-20% bonus for low-income community projects
- This may include an application process
How It Works
Our process is designed to educate and empower you so you can make a smart solar decision.
01 Discover.
Let us know you’re ready to get started & we’ll determine what you qualify for
02 Design.
We’ll provide a free quote for a custom solar system using LIDAR & satellite technology
03 Apply.
If you are pursuing a solar incentive that requires an application (like the USDA REAP Grant), we work with a dedicated grant writer who will lead the application process
04 Install.
Once your grant is awarded, we’ll handle everything including paperwork and & install to get your system up and running
05 Save!
Sit back, relax, & enjoy 30+ years of operational cost savings!
Frequently Asked Questions
The first step is to confirm your eligibility. There are many incentives for commercial solar systems to take advantage of.
- Currently the Solar Investment Tax Credit (ITC) is 30% with the possibility of other additional incentives, or “add-ons,” depending on equipment, location and other factors. Make sure to speak to a tax advisor before moving forward.
- Rural small businesses and farms may qualify for a grant up to 50% from the USDA.
- Non-profits receive similar incentives as above but in the form of a “direct payment” from the IRS.
Currently, the Solar Investment Tax Credit (ITC) is 30% with the possibility of other additional incentives, or “add-ons,” depending on equipment, location, and other factors. Make sure to speak to a tax advisor before moving forward.
You can NOT write off a solar investment for your business because there is already a strong tax benefit (Investment Tax Credit + adders) and potentially other incentives through USDA REAP.
Accelerated bonus depreciation can also be applied to your solar investment. Reach out to your tax advisor to learn more.
Currently, there are no major solar incentives specific to the state of North Carolina. There are many national incentives for residential, commercial, and nonprofit solar systems to take advantage of.
The most common incentive is the Federal Solar Investment Tax Credit (ITC), worth 30% of your solar system cost. There is also the possibility of additional incentives, or “add-ons,” depending on equipment, installation location, and other factors. Make sure to speak to a tax advisor before moving forward.
Non-profits receive similar incentives as above but in the form of a “direct payment” from the IRS.
Rural small businesses and farms may qualify for an additional grant of up to 50% from the USDA.
Accelerated bonus depreciation is allowed, but solar can not be included in section 179.
In North Carolina, no major state-wide solar incentives have been announced for 2023. There are, however, several Federal level incentives that businesses, nonprofits, and government organizations can be eligible for including:
- 30% Federal Solar Tax Credit
- 30% Direct Pay Reimbursement
- USDA REAP Grant
We recommend consulting your tax professional for an in-depth evaluation of what you may qualify for.
What areas do you serve?
Southern Energy Management is North Carolina’s most established solar installer. We’ve helped 3000+ homes and businesses make the switch to solar since 2001. Our Raleigh-based team of in-house solar experts is proud to serve the areas of:
- Apex
- Cary
- Chapel Hill
- Charlotte
- Clayton
- Durham
- Fayetteville
- Fuquay-Varina
- Garner
- Greensboro
- Holly Springs
- Knightdale
- Morrisville
- Raleigh
- Wendell Falls
- Wilmington
- Winston-Salem
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