By Todd Holtan, Namaste Solar
Businesses are boosting cash flow and differentiating their business with solar. They are capturing tax benefits, reducing operating expenses (OpEx), and meeting environmental, social, and governance (ESG) criteria. Navigating the complexities of a solar energy improvement can be challenging, so we’ve answered some common questions below.
Are There Any Incentives to Go Solar?
The Federal Investment Tax Credit (ITC) for solar is sunsetting under the One Big Beautiful Bill (OBBB), but there are still opportunities to take advantage of the tax credit through project safe harboring and other strategies. The ITC allows taxable entities to recoup 30% of the investment for the year the system is placed in service. Tax credit adders can increase the credit up to 70%.
Since the ITC is phasing out, time is of the essence. Reach out to your local trusted installer to see which strategy works for you.
100% Bonus Depreciation: 100% of your asset’s depreciable basis may be taken in year-1. The basis is the system price less half the ITC, and the value is a minimum 21% of the investment for a Colorado corporation, or up to 34% for a high-net-worth LLC member.
Xcel Energy’s Commercial & Industrial Solar* Rewards Program: If you choose, Xcel Energy will purchase your Renewable Energy Credits (RECs) for a 20-year term at the following rates:
- 8-250 kWAC = $0.04/kWh
- 250.1-500 kWAC = $0.0475/kWh
- 500.1 kW-1 MWAC = $0.045/kWh
What is the Life Expectancy of a Solar System?
Expertly engineered and constructed systems with equipment from reputable manufacturers have a three-decade estimated useful life (EUL). Solar modules typically have a 25-30 year performance warranty. Inverters have a standard warranty up to 25 years.
What is the Typical Payback Period for Solar?
A typical 200-kW commercial solar system in Xcel Energy’s Colorado territory breaks even in 6-11 years, then provides 19-24 years of pre-paid clean energy.
What Can I Expect to Save and Will Solar Reduce Demand?
In year-one, a typical 200-kW system may reduce utility bills $21K and generate about $11K of incentive income and $530K in tax benefits on your investment.
Solar will reduce demand (kW), but because Xcel Energy measures the highest single 15-minute average throughout a month, it is less predictable to model with certainty. There is also a solar rate that lowers the price of demand.
What is the Most Common Solar System in the Denver Market?
Rooftop systems are the most common and cost-effective type of solar installation in our market.
Carports protect vehicles from the sun and elements. While double the cost of a rooftop system, they offer additional benefits.
Ground-mount systems are roughly 1.5X the cost of a rooftop system and require adequate land.
How Does Solar Attach to my Roof?
Flat rooftop systems are secured to the roof by a system of ballast blocks and mechanical attachments.
Will My Roof Support Solar?
Flat roof systems need about 5-6 pounds per square foot (psf) of available deadload capacity. Pitched roofs with flush-mounted solar need about 3 psf. Generally, the more deadload capacity a roof has, the fewer mechanical attachments needed, so 7-10psf for flat roofs is preferred.
How Long Will My Solar Installation Take?
Depending on system size and complexity, installation may only take 4-8 weeks. Engineering, permitting, and equipment procurement lead-times can bring typical contract to commissioning time to 8-12 months.
What if I Don’t Occupy My Building?
Solar is beneficial to property owners and tenants in gross or triple net leases (NNN). Commercial Property Assessed Clean Energy financing (C-PACE) and green leases are two methods to overcome the split incentive.
What is Maintenance Like?
Routine monitoring and preventative maintenance ensure your system operates at peak performance and maintains manufacturer warranties. Like any building asset, a solar system requires repairs from time to time.
How Do I Get in Touch with a Commercial Solar Expert?
Namaste Solar’s purpose is to transform energy and transform business. Our experienced commercial solar developers will help you understand your project goals, return on investment, and timelines. Reach out today by going to namastesolar.com/businessbenefits or giving us a call at 303-816-3893. You can also look at our extensive commercial experience and see how we measure up.
Author bio: Todd Holtan has over 10 years of construction experience and is dedicated to helping businesses and individuals achieve their solar energy goals. He combines industry expertise and a commitment to sustainability to deliver practical solutions for every project.
