Financial Benefits

Monetizing the Roof

Solar power systems are an investment in the long-term value of any commercial property. We call it “monetizing the roof.” A solar power system can generate up to $2.00 per square foot per year in solar revenue, or a similar amount in energy savings and incentives. Whether you use the power at your building, or sell the power back to the Grid, solar creates an additional revenue stream for your business. This helps increase your annual profit, while at the same time increasing the value or your property. It’s truly a “win-win” for your business.

Federal tax incentives can cover up to 60% of the upfront costs of a solar pv system.

Here’s How They Work

  • Investment Tax Credit (ITC)*
  • 30% base ITC incentive
  • Potential 10% adder bonus when using domestic equipment

* As a credit on your federal tax return. This credit can be carried forward up to 20 years.

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Accelerated Depreciation

The IRS allows you to use the Modified Accelerated Cost Recovery System (MACRS) with a 100% first year bonus. This means that the solar system can be depreciated immediately in the year the solar power system is energized. The IRS takes away half of the ITC from the basis. So for example, if you receive a 30% ITC, then the depreciable basis of the solar system would be 85%. If you receive a 40% ITC because of qualified domestic content, then the depreciable basis would be 80%.

Solar Business Models

What is the value of a solar power system to commercial property owners? At its core, solar panels generate electricity and value whenever the sun is shining. But how can you make that energy work for you? There are a few key operating models which work for commercial property owners.

The Three Primary Business Models Our Clients Use to Create Value

Ownership

This is the most profitable model. All of the energy and financial rewards go to you. Typical payback is in the 3-6 years, with Internal Rates of Return in the range of 20-30%. This model is best for property owners who are willing to make a capital investment in the building in return for superior rewards.

Power Purchase Agreement (PPA)

With a PPA, a third party capital provider owns the system (typically the CT Green Bank) and sells you the electricity at a discounted rate compared to the standard utility rates of Eversource or United Illuminating. This model is best for non-profits, or when a company can’t maximize the tax equity incentives.

Roof Lease

A roof lease is the simplest form of going solar. A third party capital provider owns the solar system and all its direct financial benefits, while you receive an annual payment for leasing your roof to them. It’s like having a tenant who never complains about the heat! This model is best for property owners who want to collect revenue without making a direct capital investment in a solar pv system.

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