The U.S. uses the federal tax code to promote the deployment of renewable energy across the country. …
Community solar refers to a solar installation where local subscribers (ratepayers) can receive credit on their electricity bills for a portion of the renewable energy produced from the solar system. This allows multiple members of a community – from homeowners to renters to businesses – to share in the benefits of solar electricity generation even if they cannot or prefer not to install solar systems on their own property.
Since 2006, commercial solar projects in the U.S. have been eligible for a federal solar incentive known as the Section 48 Investment Tax Credit (“ITC”) which provides a 30% federal tax credit. This tax credit delivers system owners a dollar-for-dollar reduction in cash income taxes that would otherwise be paid to the federal government, in an amount equal to 30% of a solar project’s cost basis.
Since last June, when global oil prices began their precipitous slide from over $110 a barrel to less than $50 a barrel, we have had numerous corporate clients ask how this phenomenon will impact the solar industry at large, and more specifically, how the decline in oil prices will affect the economic returns associated with onsite solar photovoltaic projects.
We hear this question all the time, from our clients and potential clients, from our solar industry partners, even from our friends and family. And with the upcoming 2017 stepdown in the 30% Investment Tax Credit for solar projects – the primary federal incentive for solar – the question of solar’s need for continued subsidies is front and center.
For companies with large and geographically diverse real estate holdings, a properly executed Solar Portfolio Assessment provides a comprehensive analysis of the project-level solar feasibility across each individual facility. When solar project economics are favorable, companies can capitalize in several different ways, such as entering into long-term low-cost solar electricity purchase agreements, or by owning solar systems directly and earning attractive ROI.
On April 24th, CL&P and United Illuminating (“UI”) formally issued the Request for Proposal (“RFP”) for the 2014 Connecticut Zero-Emission Renewable Energy Credit (“ZREC”) solar incentive program.