If you’ve considered installing solar panels on your business in Wisconsin, here are some key things you need to know:
Suitable for solar
You may be surprised to learn that many northern states like Wisconsin have ample sunlight to make solar energy a viable option for many businesses.
Understand the costs
Many people shy away from installing solar panels because they believe the upfront costs are prohibitive, but it’s essential to consider the long-term savings and benefits as well as all the factors that go into the “real” cost of installing solar for your business.
Know your energy needs
Before installing solar panels, it’s important to understand your business’s energy needs. This will help you and your solar installer determine the size of the solar panel system you need and how much energy it will generate.
Find a reputable installer
When it comes to installing solar panels, it’s important to work with a reputable installer who has experience working with businesses in Wisconsin. Look for a company that is licensed and insured, and has positive reviews.
A professional installer will also be able to assess your roof’s suitability and make recommendations for the best placement and sizing of your solar photovoltaic system.
Tax benefits for businesses that install solar
Businesses that install solar panels in Wisconsin can benefit from a range of tax incentives and grants. Here are some of the main incentives available:
Business energy investment tax credit
The federal government passed the Inflation Reduction Act in the fall of 2022, which extended and lowered the business investment tax credit (ITC) through 2032 before seeing its first step down. The ITC allows businesses to deduct up to 30 percent of the cost of their solar panel systems from their federal taxes for systems that start their installation process before 2032. However, that number will decrease to 26 percent in 2033.
Sales tax exemption
Wisconsin offers a sales tax exemption for the purchase of renewable energy systems, including solar panels. This can save businesses up to 5% on the cost of their solar panel system.
Focus on Energy Program
Focus on Energy is a statewide program that provides financial incentives for businesses that install energy-efficient equipment and renewable energy systems. The program offers incentives for both residential and commercial customers, including cash-back rewards and grants.
USDA Rural Energy for America Program (REAP)
REAP provides grants and loan guarantees to businesses in rural areas that install renewable energy systems, including solar panels. The program is designed to promote economic development in rural communities and support the adoption of renewable energy technologies.
It’s important to note the availability and amounts of these incentives can vary depending on the size and type of business, as well as the specific solar panel system being installed. To learn more about the incentives available to your business, it’s best to consult with a professional solar installer who can help you navigate the relevant state and federal programs.
Accelerated depreciation schedule
If a business claims a solar ITC tax credit, they can also use an accelerated depreciation schedule. This helps for greater depreciation of expenses in the initial years of the system and reduces the overall cost of the installation. The difference between the ITC and the Accelerated Depreciation is, “the ITC is a tax credit—a dollar-for-dollar reduction in taxes owed—depreciation is a deduction, meaning it only reduces a business’s taxes by the depreciation amount multiplied by the business’s tax rate.” This process helps give taxpayers greater immediate reduction in their federal tax liability.
Contact All Energy Solar today to schedule a consultation and learn how we can help you make the switch to clean, renewable energy. Or To learn more about solar for business, download our ebook Solar for Business.
