DEMAND BETTER SOLAR
The benefits of going solar are undeniable – you will save money while doing your part to help the environment. But not all solar installation companies are created equal. National Solar Energy, with its experienced team, has the ability to work with your business and locations and with all types of clients, budgets, and financing.
Solar Rebates Explained (Illinois)
Solar technology is disrupting the energy markets and National Solar Energy can help you take full advantage of all the government and utility sponsored solar incentives. The incentives don’t last forever and some of them decrease in value when more people sign up, but we can help you capture them if you get started right away.
Commonwealth Edison Rebate: This is a rebate based on the size of the system. For example, (Company A) has an 880Kw system, the rebate would be $250.00 /Kw x 880 = $220,000. This is an immediate rebate, paid within 60 days after submitting all required paperwork for qualifying installation.
Solar Renewable Energy Credits (SREC): These credits are based on how much power a solar system is produces. For every 1000 kilowatt hours of electricity that a solar system produces, it becomes eligible to claim (1) SREC.The SREC represents 1000 kilowatt hours of solar electricity that was generated from a renewable source and the SREC is valuable because of its “green electricity”.
Why is electricity from solar more valuable from electricity generated from coal? The State of Illinois has a mandated goal of having 25% of the state’s electricity generated from renewable sources by 2025. This puts a tremendous burden on the power companies to generate power from renewable sources.; but instead of having to build all the solar arrays themselves, a power company can buy the SRECs from a solar system owner and then claim that power (1000 Kwh) as part of that power that was generated by the utility from renewable resources!
Currently the SREC program involves a 15-yr contract from Com-Ed to buy the SRECs at a guaranteed price of $47.50. For (Company A) , the estimated value of the 15-yr contract is approximately $816,768. This would be a guaranteed amount once the contract is signed; however, the price of the SRECs are subject to apply and the guaranteed price goes down as more people sign up. The sooner you sign up, the higher price you get paid!
The power company pays the entire value of the contract within the first four years of the contract (20% upfront and 20% each year for the next four years). There are some rules and responsibilities, and data reporting that is required by the solar array owner under the terms of the contract and the utility company requires 5% deposit about $41,000 for the (Company A) project based on the contract value to get started.
Federal Tax Credit: This is a credit that offsets actual tax liability. The tax credit is based on a 30% of the total cost of the system for 2023.
For (Company A) that buys a $2,191,200 system. The 2019 tax credit earned would be $657,360 ($2,191,200 X .30 = $657,360).
This is a tax credit, so if a business owes $657,360 in federal taxes, this credit wipes the tax liability completely out. In the case that the business owes less than the $657,360 in tax liability , then the credit can be rolled forward into the next year and beyond, and in some cases, the credit may even be applied to the previous year of installation.
Federal Accelerated Depreciation: The Tax Reform Bill of 2017/2018 modified bonus depreciation under Code Section 168(k) to allow 100% expensing for certain renewable energy property placed in service after September 27, 2017. and before January 1, 2023. In addition, under the Federal Modified Cost Recovery System (MARCS), businesses may recover investments in certain property through accelerated depreciation schedules. For PV systems,the taxable basis of equipment must be reduced by 50% of any federal tax credits associated with the system.
EXAMPLE: A company can deduct through depreciation expense, the entire (100%) value of a solar system in the first year OR spread the depreciation over a 5-year time frame, whichever is best suited for their tax situation. Since the corporate business tax rate is 21%, getting the depreciation is a net effect of saving an additional 21% of the cost of the system on your tax bill.
In our example, a $2,191,200 system would need to be discounted by 50% of the $657,360 Federal Tax Credit received, so the system would be valued at $1,862,520 for depreciation calculations.
{$2,191,200 cost of system – $328,680 (50% of the $357,360 Tax Credit)}=$1,862,520.
This means that the business that owns the solar equipment could write off the adjusted value of $1,862,520 in the first year OR in the 5 separate yearly depreciation expenses of $372,504 each year. This translates into a bottom-line value of 21% tax savings of $391,129.90.
OUR PROCESS
NSE staff will design and install your solar system, plus support this system throughout its lifetime, ensuring maximum savings and peace of mind.
OUR EXPERIENCE
When you are working with our knowledgeable team, NSE will deliver unrivaled customer service..
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