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Examples of Solar Hot Water Rebates For Businesses

With the recent environmental tragedies in the Gulf of Mexico and the coal mines of West Virginia, it’s time for Americans to realize that there are affordable alternatives to dangerous and polluting fossil fuels: solar.

Solar hot water (sometimes referred to as “solar thermal”) technology has been around for over 100 years and remained a cost effective alternative to gas and electric bills around the world…. except the U.S. That’s changing now, however, due to rising oil and gas prices, and new local solar rebates.

Recently, a number of states have implemented solar hot water incentives for businesses, such as hotels, apartment buildings, restaurants, laundry mats, car washes, etc.

Each state has its own policy and every business has different needs. So the net costs will vary for every installation. Here are samples of commercial solar thermal rebates in a few states:

  • Arizona: Commercial buildings are eligible for a 10% tax credit of up to $25,000 for one building, or an aggregate of $50,000 per customer in one year. The Phoenix based APS provides a performance based rebate, which can range between $0.051/kWh-equivalent and $0.07/kWh-equivalent, up to 50% of total system cost. Other utilities in Arizona have their solar water heating incentives, as well.
  • California: Natural gas heated commercial or multifamily buildings up to $500,000 towards the cost of a solar thermal system.
  • Hawaii: State rebates for commercial installations add up to $125 per deferred kW, plus $0.05/kWh for retrofits. In addition, businesses can receive a state tax credit of 35% of the actual cost or $250,000, whichever is less. Hawaii businesses also get a 100% real estate tax assessment exemption for the new solar hot water system. Your business may also qualify for specific utility rebates as well, such as Kaua’i Island Utility Cooperative (KIUC) which pays for 50% to 80% of equipment costs.
  • Florida: In Florida, commercial buildings and apartment buildings receive $15 per 1,000 BTU/day for solar hot water installations, up to $5,000. In addition, Florida has long exempt any sales tax for solar thermal systems. Be aware that this funding keeps running out…and then getting refunded at the last minute.
  • Texas: Businesses get a 10% corporate tax deduction based on amortized cost. All Texan companies are also free of any property tax assessment from the new solar hot water equipment. In addition, each utility has their own rebate program.
  • Pennsylvania: Pennsylvania’s new Sunshine solar program provides businesses a rebate up to 25% of installed system cos, to a maximum rebate of $20,000.
  • Maryland: The Maryland Energy Administration (MEA) is giving mid-size commercial and industrial companies a solar hot water grant of 15% of installed cost up to $25,000. The solar thermal system must be at least 100 square feet in size. Businesses may also qualify for an additional state rebate of $2,000.
  • The Federal Government. Finally, in addition to all of the above, the U.S. government provides all businesses a 30% Federal Investment Tax Credit that is calculated before any state or local incentives, but subject to being taxed as income.

Here’s a list of the latest state and utility incentives for solar hot water systems. Always keep in mind that these incentives are subject to available funding. Sometimes utilities or states run out of rebate money due to high demand, so it’s a good idea to check with your local installer to find out what programs are currently available. A good installer should not only be able to tell you what’s available, but also be able to explain the rebates and show your potential return on investment.

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