Commercial Incentives Explained

Federal Investment Tax Credit (ITC)

Purchasers of a new solar energy system get a tax credit of 30% of the cost of the system.  This is money the business would have paid to the IRS in taxes. It can be spread out over 5 years. Pass through entities can apply that to their personal taxes against passive incomes.  There are financing options that can monetize this credit for entities that can’t utilize it, for example not for profits and business that don’t have a high enough tax liability. 

Modified Accelerated Cost Recovery System (MACRS Depreciation)

Allows the business to depreciate the cost of the system over 5 years.   This is a tax deduction each year. Like the ITC there are ways to take advantage of this deduction if it won’t directly benefit the business.

Solar Renewable Energy Certificates (SRECS)

SRECS are the commodity value of solar energy generated.  The calculation is based off of the energy produced over 15 years.  The value of each certificate varies based on the size of the system and total certificates in the market.  We do the application and sale of certificates for you. These are checks that you get over 1 to 5 years depending on system size. The value of each SREC is set by the Illinois Power Agency and decreases in amount as applications come in.  The amount you are quoted could be different from what you get. There can be a delay in getting SREC money if the years allocation is used, you will have to apply next year.  It is to your benefit to sign a contract early so we can immediately apply for your SREC.