A Lighter Load – Financial Incentives for Solar and LED Installs

Though you get more from your money with every passing year, the cost of a solar panel install or a full conversion from conventional lighting to LED’s can be daunting. Fortunately, everyone from Congress to individual LED manufacturers are realizing the benefits of these technologies and helping to lighten the load. Let’s review some of the programs that can help you recoup your investment.

Solar Incentives and Rebates
With tax incentives, rebates, and other offsets, you can get back up to 70% of the cost of a solar panel installation. In Illinois, a number of incentives are available.

Federal Tax Credit
Currently, you’ll receive a federal tax incentive of 30% of the cost of your solar system. Even better, if your tax liability is less than that, you can roll the incentive over to future tax years. Now is a great time to take advantage of the credit, because unless Congress acts, the incentive will drop to 26% for the 2020 tax year, 22% for 2021 and just 10% after that.

The Adjustable Block Program
Approximately 30-40% of the cost of any solar installation will be earned back in Renewable Energy Credits under the Adjustable Block Program. This program, established by the Future Energy Jobs Act, pays solar users in Renewable Energy Credits via 15 year contracts. Best of all, if your system is 10 kilowatts or less, you’ll be paid all of your incentive upfront; if it’s between 10 and 2,000 kilowatts, you’ll receive 20% up front. At the current ComEd rate of 7.1 cents per kilowatt hour, this can end up being a sizable check.

100% Bonus Depreciation For Businesses Using Solar
As part of the Tax Cuts and Jobs Act in 2017, the federal government allows businesses to claim 100% bonus depreciation on certain “qualified property,” which includes new solar panel installs.

The one drawback to bonus depreciation is that the rules and compliance can be complex, so be sure to reach out to Thayer, your trusted partner for all energy efficiencies, in order to get the full advantage.

ComEd’s DG Rebate
ComEd offers business customers a Distributed Generation (DG) rebate to help businesses installing a 2,000 kilowatt or smaller system deal with installation costs. The system must contain a smart inverter, which is a wise choice anyway. The rebate provided is $250 per kilowatt of capacity, so, for example, a business putting a 10 kilowatt system in place would receive $2,500 in rebated funds.

LED Incentives and Rebates
LED lighting will save your business thousands of dollars through lower power use and lower replacement costs alone, but a number of programs will reduce your cost of using LED’s and other lighting-related technology even further.

ComEd DG Rebates
For LED installation, ComEd offers a simple rebate of 50 cents per watt reduction for each qualified fixture you change from conventional to LED. Ergo, a hi-bay fixture that uses 400 watts and is replaced with a 120 watt LED would qualify for a rebate of $140.00. Now multiply that by dozens or hundreds of fixtures in your facility and you’ll find it adds up quickly!

There are also rebates for installing occupancy sensors and other controls that reduce the use of lighting, and timers and photocells on exterior lighting. Typically, when you invest money to save power, ComEd will pick up part of the cost.

179D Commercial Building Deduction
If lighting, building materials, and/or HVAC and water systems that reduce a building’s energy use by 50% or more are installed, the building owner is eligible for up to $1.80 per square foot tax credit. Reductions of less than 50% may qualify for a 60 cent per square foot deduction.

Financing from IFA and PACE
While not technically an incentive, commercial projects that can demonstrate “their projects provide a significant public benefit for the citizens of Illinois” are eligible for assistance from the Illinois Finance Authority. Projects that are eligible include installing LED lighting or solar panels. PACE programs, help home and business owners pay for the upfront costs of green initiatives, such as solar panels, which the property owner then pays back by increasing property taxes by a set rate for an agreed-upon term ranging from 5–25 years. This allows property owners to begin saving on energy costs while they are paying for their solar panels. This usually means that property owners have net gains even with increased property tax.

Clearly, there are a lot of options and programs to help make your decision to “Go Solar!” an easier one. But making sure you take advantage of every appropriate credit/rebate can be complex. Turn to Thayer, your trusted partner for all energy efficiencies, for help navigating the rules of these incentives and deciding what kind of equipment to install – we are glad to help. Get in touch today, and we’ll see how we can help you lighten your load and brighten your bottom line.