Commercial solar in Austin & Greater Texas is growing in popularity with businesses looking to save money and reduce their carbon footprint. Solar panels can be installed to generate electricity, providing businesses with a clean and reliable energy source. This article will provide information on the cost savings, benefits, and installation process for commercial solar in Texas; and just how the Inflation Reduction Act fast tracked the ability to capture a ROI faster than ever. We will also discuss available rebates and other incentives for businesses that invest in solar energy.
What is the Inflation Reduction Act?
The Inflation Reduction Act of 2022 is a new law that was passed by the US Congress that aims to reduce inflation and invest in domestic energy production. It will make the largest investment in climate and energy in American history and enable the US to tackle the climate crisis, advance environmental justice, and secure the nation’s position as a world leader in clean energy manufacturing. The Act will provide approximately $11.7 billion in total for the Loan Programs Office (LPO) to support issuing new loans, as well as create a new loan program, the Energy Infrastructure Reinvestment (EIR) Program, to help retool, repower, repurpose, or replace energy infrastructure that has ceased operations or to improve the efficiency of infrastructure that is currently operating. [1][2][3]
The Inflation Reduction Act provides a number of incentives to help businesses save on their energy costs. One such incentive is a tax credit for businesses that install solar panels on their commercial buildings. This incentive can reduce the cost of installing solar panels by up to 30 percent, significantly reducing the cost for the business when compared to traditional energy sources.
With the enhanced tax credits from the Inflation Reduction Act as well as Austin Energy’s ‘Performance Based Incentive (PBI)’ and ‘Value of Solar (VOS)’ programs, there has never been a more attractive time for Austin business owners to install solar on their facilities. By combining these incentives, business owners can see a return on their cash investment in under 4 years in most cases. By taking advantage of Axis Solar’s financing options, businesses are able to install solar at $0 cost out of pocket in most instances, while still being able to capture significant cash flow value from the tax credits.
What Are the Cost Savings of Commercial Solar in Texas?
The first incentive that businesses in Austin & Texas can take advantage of is a tax credit (known as an Investment Tax Credit, or ITC). This tax credit allows business owners to recoup up to 30 percent of the cost of installing solar panels on their commercial property. This makes it easier for businesses to cover the initial costs associated with solar, helping to make it a more attractive option.
The Inflation Reduction Act of 2022 also simplified the process for obtaining tax credits, particularly for non-profit, public, or charitable entities. This was achieved by allowing these categories of entities to receive Direct Pay of the tax credit amount or simplification of the ability to transfer the tax credit to another entity. (It should be noted that the IRS is yet to issue final guidance notes on the precise mechanism for this transfer or direct pay).
A number of Texas electric utilities offer direct rebates to customers who install solar on their businesses. These are typically in the form of upfront cash rebates or accelerated bill credits to allow commercial customers to achieve quicker payback on their systems.
In addition to the tax credits and rebates, businesses in Austin & across Texas can also benefit from net metering. This means that businesses are able to sell excess solar energy back to their utility company at a rate that is typically equivalent to the energy rate they pay for traditional energy consumption. This helps businesses earn back their investment in the solar panels more quickly.
What Other Benefits are available for Commercial Solar Panels in Texas?
In addition to the financial benefits, businesses can also experience a number of other benefits associated with installing solar panels. Solar energy is much cleaner than traditional energy sources, meaning that businesses can make a positive impact on the environment. Solar energy is also dependable, meaning that businesses can count on a consistent energy source for their operations. Finally, businesses can create a positive image for their companies by showcasing their commitment to renewable energy sources.
Axis Solar is an Austin-Based Solar company that specializes in Commercial Solar Installations and residential solar support. If you’d like more information about installing solar panels on your business, please contact us at (512) 501-4084 or email Help@Axis-Solar.com.