Investing in Solar to Cut Taxes (the Secret to Faster ROI)

investing in solar to cut taxes

Did you know that investing in solar energy can help you cut your taxes? If you own a business and the property, you can take advantage of tax incentives that shorten your payback period and get a faster return on investment (ROI) on your commercial solar energy system. This article will explain how investing in solar to cut taxes can get you a quicker ROI on your commercial solar energy system investment.

How Claiming Tax Incentives Can Help Your Business

When investing in solar energy, business owners can benefit significantly by taking advantage of tax incentives. These can help reduce your business taxes and shorten your commercial solar energy system investment payback period. You will also see a faster ROI and start saving money sooner.

Cut taxes with solar incentives

One of the federal tax incentives for businesses investing in solar energy is the Investment Tax Credit (ITC). This incentive can significantly impact your business's bottom line.


The ITC is a federal tax credit available to businesses that install solar panels. It enables your business to deduct a percentage of the cost of the system, including component parts and labor, from its federal taxes. There is no cap on the amount that you can claim for your solar installation with the ITC, and you can carry the credit forward for up to five years if you cannot use it in the year earned.

Your business must install solar panels in the same year that it claims the credit to qualify for the ITC. The Inflation Reduction Act of 2022 raised the ITC from 26% to 30% for commercial solar installations until 2033. After that, the ITC credit percentage will drop to 22.5% in 2034, 15% in 2035, and 0% in 2036.

Bonus Credits

Your business can qualify for additional credits with the ITC if your solar energy system meets specific requirements. You become eligible for these credits if your solar energy system meets any of the following:

  • The United States manufactures 40% of the solar energy system's components,
  • The solar energy system is in an energy community, or
  • The solar energy system is in a low-income community or on tribal land.

State Solar Incentives

Many states offer solar tax credits that you can apply to your state income taxes. These state-level incentives can further lower the cost of investing in solar energy for your business. Solar incentives vary significantly from state to state, so it's essential to research what's available in your area before investing in a commercial solar energy system.

Get a faster return on your investment

By taking advantage of federal credits and state tax incentives, your business can reduce the cost of investing in solar energy, resulting in a faster ROI. Your payback period (the time that it takes to recoup your investment) will be shorter, and you'll save money over the lifetime of your solar energy system (usually twenty-five to thirty years). Once you recoup the initial investment, your business can enjoy years of tax savings and reduced energy costs.

How to Start Investing in Solar to Cut Taxes for Your Business

If you're a business owner considering investing in solar energy, take advantage of all the available tax incentives to make your solar energy system even more affordable. Investing in solar to cut taxes is the best way to get a faster investment return on your commercial solar energy system. Let Geoscape Solar design a solar energy system tailored specifically for your business. It can help you maximize your tax credits and get the most out of your investment.

At Geoscape Solar, we help businesses utilize solar energy for profit. Your business will become energy independent, be able to decrease utility costs, and leverage available solar incentives for a quick ROI.

To discover how installing solar energy on your property will increase your business profitability, contact one of our energy specialists!