Solar Energy for Farms
Part of what makes Southern Maryland such a wonderful place to live is how local, family-owned farms are an integral part of our community. As a locally owned business and part of the Southern Maryland Community, we’ve worked with many farms in many ways. We understand how important it is to lower costs and to have stability. Solar energy is a great way for farms to save money AND predict energy costs (easier than the weather) while helping our environment.
Solar Energy Incentives and Grants for Farms
As good as the incentives are for homeowners to install solar panels, the farm and business incentives are even better.
- USDA Rural Energy for America Program (REAP) Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants - These grants and loans are available to qualifying farms. With our contacts in the USDA, we will help walk you through the process of seeing if your farm qualifies for this solar incentive and the grant application. We make it easy.
- Commercial Federal Solar Tax Credit - In 2021, 26% of all solar energy costs are rebated back in the form of an income tax credit. This includes any costs incurred to enable or enhance your solar performance such as roof repairs, or tree removal. While 2023 is the last year for the residential tax credit, the commercial tax credit remains and will drop to 10% in 2023 and beyond. There is an IRS safe harbor provision that allows you to capture the previous year’s tax credit if the project is significantly constructed by the end of the year. (see page 3 for construction schedule scenarios).
- Accelerated Depreciation - While the useful life of a solar system is greater than 25 years, the IRS allows qualifying solar energy equipment a depreciation cost recovery period of five years. With the additional bonus depreciation, a typical system gets about 25% of the system cost back in the first year on top of the regular tax credit with more depreciation benefits coming over the next four years.
- Maryland Commercial Clean Energy Rebate Program - While homeowners get a $1,000 Maryland grant, Maryland businesses can earn even more. For example, if a solar system has 100 325-watt panels, that translates into a 32.5 kilowatt solar system. The total rebate/grant amount will be $4,675.
- Maryland Solar Renewable Energy Credits (SREC) - SREC’s (pronounced S - REX), are your chance to take part in the renewable energy trade market. The Renewable Portfolio Standard (RPS) requires utilities to receive a portion of their electricity from renewable energy. This is managed through credits. For every 1,000 kWh (1 MWh) of electricity produced, you earn roughly 1 SREC. The value of an SREC is determined by supply and demand as well as fees imposed on utilities for not meeting solar energy targets. Currently in Maryland, the market value of one credit is about $77. Therefore, a solar system that produces over 14,000 kWh could earn 14 SRECs at $77 = $1,078 per year in revenue paid to the solar system’s owner. We will register your system and help you participate in this exciting and lucrative program.
- Maryland Property Tax Exemption - Due to a series of Maryland legislative acts, solar systems are exempt from state and local property tax assessments. This means you can add value to your business without adding additional tax liability. More details are on the Energy Department’s website and we always recommend discussing your unique case with a tax professional.
- Maryland Net Metering - Net metering is a billing arrangement that allows your solar panels to supply any excess power they produce to the power grid. While the rate the utilities charge for electricity and the rate they are willing to pay you differ, there may be a small income generated depending on your consumption and production balance.
Creative Solar Energy Financing for Farms
Commercial solar has some unique funding opportunities, including:
- C-PACE, a way to pay for energy upgrades through local property taxes.
- Tax Equity Partners - For businesses without a tax liability, we find partners to help you capture a portion of the tax benefits.
Creative Farm Solar Design
Commercial solar installation projects can come in many different and customized designs:
- Flat roof
- Ground Mount solar
- Pole Mounted solar (This is popular for farms with livestock).
- Solar + Battery Backup
An Added Solar Energy Bonus
Energy Select offers a solar referral program called Select Partners. You can use it as a revenue maker, or as a solar discount program exclusive to your customers and/or employees.