The Solar Investment Tax Credit (ITC) has investors motivated to get their projects started quickly. To receive a 26% tax credit, you must start construction before the end of 2020[1] otherwise the credit drops to 22% in 2021 and to 10% for projects beginning construction in 2022.[2] There’s also motivation to generate revenue as fast as possible to meet quarterly goals. The attention to the project in its early stages is critical for you to receive the most bang for your buck.
Early on, it is imperative to engage with an engineering firm experienced working with the jurisdiction of the project, the utility company utilized, and also with equipment procurement to help stay on schedule. Another area of necessary expertise is fire code. Utilizing software that provides preliminary estimates on size and energy production can seem helpful for your client to visualize their project, but oftentimes the models generated show a project that would not meet fire code. For instance, models show panels covering skylights and panels positioned too close to rooftop units. When this occurs, redesigning the project adds time to your schedule and sometimes the redesign to meet the code results in less energy produced because of the reduction in project size. More time is added to the timeline when less energy is expected because the contract needs to be re-written.
There are many incentives to start a solar project including the decrease in cost of installation over the years (70% over the past ten years)[3], but investors will get the most out of the project when contracting with an engineer as quickly as possible to establish a system that will meet their requirements, moving your project forward.
Written By:
Brian Baird, PMP, LEED AP |LinkedIn profile: https://www.linkedin.com/in/briandbaird/
Biography: https://core-states.com/about/brian-baird/
Director of Energy and Sustainability
D: 909.467.8904 E: bbaird@core-states.com
Core States Group | www.core-states.com
4240 East Jurupa Street | Suite 402 | Ontario, CA 91761
[1] “The Energy Credit: An Investment Tax Credit for Renewable Energy” Congressional Research Service. November, 2018, https://fas.org/sgp/crs/misc/IF10479.pdf. Accessed Jan. 31, 2020.
[2] “Commence Construction Guidance” Solar Energy Industries Association. https://www.seia.org/initiatives/commence-construction-guidance. Accessed Jan. 31, 2020.
[3] “Solar Industry Research Data – Solar Industry Growing at a Record Rate” Solar Energy Industries Association. https://www.seia.org/solar-industry-research-data. Accessed Jan. 31, 2020.
