If you’re thinking about installing solar panels on your business in Minnesota, here are a few things you need to know:
10,000 lakes… but what about the sun?
In the land of 10,000 lakes that is known for its frigid winters, you may be surprised to learn that many northern states like Minnesota have ample sunlight to make solar energy an increasingly attractive option for many businesses. In fact, Minnesota is now ranked in the top third of states investing in solar energy, with 3.9% of the state’s electricity now coming from renewable energy.
Know your energy needs and undergo a cost-benefit analysis
The cost to install solar has come down significantly over time. In your review of costs and benefits, it’s crucial to factor in the long-term savings and benefits, such as improvements in reliability, sustainability, and stability that solar provides.
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 considering solar panel installation, it’s important to work with a reputable installer that has years of experience working with businesses in Minnesota. Look for a company that is licensed and insured, and has positive reviews.
A professional installer will also be able to assess the roofs or other suitable areas at your facilities and make recommendations for the best placement and sizing of your solar photovoltaic system.
Tax benefits for businesses that install solar
Now is a great time to go solar, thanks to the wide variety of regional, state, and federal incentives available to businesses. Here are a few of the main incentives available:
The federal Investment Tax Credit for businesses
The federal government recently extended the business investment tax credit (ITC) which allows businesses to deduct 30 percent or more of the cost of their solar panel systems from their federal taxes—a gigantic upfront savings.
Sales tax exemption
In addition, Minnesota offers a sales tax exemption for the purchase of renewable energy systems, including solar panels. This can save your business up to 6% on the cost of your solar panel system.
Net metering
Businesses in Minnesota are eligible for net metering. This program allows you to sell any excess energy your panels produce back to the grid, not only offsetting your energy costs but also creating a potential additional revenue stream.
USDA Rural Energy for America Program (REAP)
REAP offers grants and loan guarantees to rural businesses implementing renewable energy systems like solar panels, with the end goal of fostering economic growth in rural areas and facilitating the integration of sustainable energy solutions. Keep in mind that the availability and amounts of REAP 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.
