Solar financing options for commercial buildings are diverse and can significantly reduce the financial burden of adopting solar energy.

One notable option is the Rural Energy for America Program (REAP) grant, which provides financial assistance to agricultural producers and rural small businesses for renewable energy systems and energy efficiency improvements. The REAP grant can cover up to 25% of the total project costs, making it a substantial financial aid for those looking to invest in solar energy.

Another effective financing method is the Commercial Property Assessed Clean Energy (CPACE) loan, which allows property owners to finance the up-front cost of energy improvements on a property and pay the costs back over time through a voluntary assessment. This loan is repaid via property tax assessments, which can be spread out over several years, easing the immediate financial impact. CPACE loans often cover 100% of the project costs, including soft costs like design and engineering.

Additionally, businesses can take advantage of the Modified Accelerated Cost Recovery System (MACRS), which allows for accelerated depreciation of solar equipment, thereby reducing taxable income and providing significant tax benefits in the initial years of the solar installation. This system typically allows businesses to recover their investment in solar over a five-year period, providing a quicker return on investment.

Furthermore, businesses can receive up to 50% in tax credits, such as the Investment Tax Credit (ITC), which currently offers a credit for 26% of the cost of installing solar systems on residential and commercial properties. These tax credits significantly enhance the financial viability of solar investments by reducing the effective cost of solar installations.

Another valuable option is Elective Pay, which allows applicable entities, including tax-exempt and governmental entities that would otherwise be unable to claim certain credits because they do not owe federal income tax, to benefit from some clean energy tax credits. By choosing this election, the amount of the credit is treated as a payment of tax, and any overpayment will result in a refund. For example, due to the Inflation Reduction Act, a local government that makes a clean energy investment that qualifies for the investment tax credit can file an annual tax return with the IRS to claim elective pay for the full value of the investment tax credit, as long as it meets all of the requirements, including a pre-filing registration requirement.

Together, these options—REAP grants, CPACE loans, MACRS depreciation, substantial tax credits, and elective pay—make solar energy more accessible and financially viable for commercial building owners, encouraging the adoption of renewable energy and contributing to sustainability efforts.