Discover the Benefits of Installing Solar on Investment Properties
Solar power has been bringing excellent returns to homeowners for over a decade. However, because the tenants usually pay the electricity bills, owners of investment properties often are unaware of the other four financial benefits of installing solar on their investment properties. Savings on the utility bills during the current lease term may be the smallest of the financial benefits available. The following highlight some of these great benefits.
Tax Credit
The federal government offers a tax credit for solar, called Investment Tax Credit (ITC). The ITC allows businesses and homeowners to deduct a part of the costs for their solar systems from their federal taxes, which is equal to 26% of the costs for the solar systems. Some states also provide a tax credit for solar. Most people could claim the tax credit in the first year; you should consult your tax advisor for more information.
Accelerated and Bonus Depreciation
Under the Modified Accelerated Cost Recovery System, businesses could write off the cost of their solar systems for accelerated depreciation. Also, the bonus depreciation is 100% from January 1, 2018, to December 31, 2022. Therefore, the depreciation benefits allow the owners of investment properties to recover the cost of installing solar fast, which could be almost as much as the tax credit in the first year.
State, Local, or Utility Rebates
These benefits depend on your location. Some states, utility companies, or municipalities that want to promote green energies provide rebates for installing solar. These rebates could further lower the costs of installing solar by 10 to 20%.
Building Appreciation
Buildings with solar systems tend to have higher values and sell faster than the ones without them. According to Zillow, which analyzed the residential homes sold across the country, on average, solar systems boost home value by 4.1% throughout the U.S. As the solar revolution is gaining steam, adding solar panels also makes the commercial buildings more valuable and more desirable to your tenants. Some of the world's biggest commercial building owners like Walmart and Kohl have installed solar for solid financial reasons.
Saving on Utility Bill
It depends on your electricity bill and your building location. Some cloudy states provide more savings than the sunnier ones, simply because the utilities are charging so much for electricity! Let's evaluate your building based on the site, usage, and electricity rates and find the best fit.
Find More Benefits of Installing Solar on Investment Properties
Andrew is passionate about the mission to save the planet. So far, he has installed over 1,100 solar systems. If you are interested in installing solar on your investment property, contact Andrew today for analysis. He is a great expert in the green energy industry and could help you meet the needs of solar installation and financial goals.