Solar Incentives for Business in Texas
Texas offers a range of solar incentives for businesses designed to help them switch to solar power with low up-front costs and to provide a faster return on investment. Thanks to the state’s abundant sunshine and smart solar incentives, businesses in Texas are increasingly turning to solar energy to power their businesses. But for most businesses to choose to go solar, it must make financial sense. Here’s how incentives help.
The Solar Trends in Texas
Texas is one of the best states for solar in the US with an average of about 8 hours of sunlight throughout the year. Smart businesses and homeowners are already taking advantage of this abundance as nearly 23 gigawatts of solar was installed in the state by the end of 2023. That’s enough energy to power millions of homes and nearly a thousand businesses. So, if you are a business owner in Texas and looking to cut off your operating costs, switching to solar power is a good option. Also, the state is offering solar incentives and rebates to empower more residents with clean energy.
Also, More businesses in Texas are looking into solar now as it continues to become more affordable, thanks to improvements in solar panel efficiency and declining solar installation costs. Another important factor? Solar incentives for businesses in Texas make it more affordable and speed up the return on investment (ROI) for going solar.
What Commercial Solar Incentives Are Available in Texas?
Companies considering solar energy in Texas should learn about the available incentives and programs that make it easier to go solar in Texas. Furthermore, Local governments, utilities, and the federal and state governments provide incentives to help businesses go solar in the Lone Star State.
Federal Investment Tax Credit (ITC)
While the Federal Investment Tax Credit (ITC) isn’t a state incentive, it’s still one of the most important incentives for companies to invest in solar energy. With this incentive, companies can deduct 30% of the costs of installing a solar energy system from their federal taxes. That defrays a significant portion of the upfront expenses of solar installation.
State Solar Property Tax Exemption
In Texas, a property tax exemption is available for solar energy systems on commercial buildings. This protects the business from paying for the increased value a solar system adds to the building in its property tax assessments. With the exemption, the business property is taxed based on the property value before the system is added. In this way, businesses will continue to save on their property taxes throughout the life of the solar installation.
Texas PACE Financing
The Texas PACE Financing is an important solar incentive for Texas business owners. PACE stands for Property Assessed Clean Energy (PACE) financing. It’s a program that offers low-cost, long-term financing for upgrades for water and energy-saving projects. TX-PACE was enabled by Senate Bill 385 (83R), which was passed by the Legislature in 2013. It permits counties and municipalities to collaborate with financial institutions and property owners to pursue improvements using a lien against the property to secure low-interest rate financing that’s repaid over 10 to 20 years.
In other words, PACE secures private funding for a duration equal to the expected lifespan of the upgrades, saving more money on utilities than it takes to pay back. if you sell the business, the PACE loan payback requirement shifts with the property to the new owner. So, you can sale out your property without worrying that you will overinvest.
Solar and Wind Energy Business Franchise Tax Exemption
Under this program, Franchise taxes do not apply to Texas businesses that manufacture, market, or install solar or wind energy equipment exclusively. This exemption has no upper limit, which makes it a powerful motivator for solar and wind energy companies.
How can a business maximize the benefits of solar in Texas?
Businesses in Texas can maximize the benefits of renewable energy by learning about local solar incentives and limitations. Also, Investing in high-quality panels and solar equipment ensures better performance and longevity. Moreover, businesses can also look into financing options to reduce upfront expenses, including leases or power purchase agreements.
Also, It is very important to choose a certified commercial solar installer for seamless and hassle-free installation as it is a big investment. Lastly, especially during periods of peak demand, combining solar systems with energy storage can improve reliability and lessen dependency on the grid.
For businesses interested in embracing the solar revolution in Texas, contact SolarSME, one of the top solar installers in Texas. The company offers top-tier Commercial Solar Installations.
