What do the New England Journal of Medicine and Eagle Solar & Light Have in Common?

The New England Journal of Medicine (NEJM) has powerfully stepped into the Climate Change crisis and will hopefully make the impacts of Climate Change relevant to everyone, thanks to its editorial, Call for Emergency Action to Limit Global Temperature Increases, Restore Biodiversity, and Protect Health. As an environmental planner who has worked to protect the planet since 1990, and as a person who was concerned about planetary preservation all the way back to 1974 when I was eight years old and began lobbying my parents, I see the NEJM health statement as critical to bringing unity and action to address the Climate Change crisis.

Impacts to human health are occurring, they are catastrophic for many and they will only grow for decades. Unfortunately, those who are most marginalized and contribute the least to the crisis will experience overly large health and community impacts due to Climate Change. I am very proud to work with Eagle Solar & Light in North Carolina to bring renewable energy and climate resilience to the underserved communities who are most impacted.

The Duke Energy Solar Rebate is an important incentive that allows North Carolina’s nonprofit communities obtain solar installations, reduce their energy bills and redirect their funds to more important parts of their missions. That rebate, combined with Eagle Solar & Light’s leasing program, negates the need for a large capital outlay. Some nonprofits may choose to make a cash purchase because of the availability of donor funds, while others often pursue the solar lease because it may make more financial sense to finance the investment. With the potential for future Duke Energy utility rate increases (needed to offset coal ash pond cleanup and grid modernization), solar-produced kilowatt hours become more valuable over time as compared with the utility kilowatt cost.  Additionally, Eagle Solar & Light includes the cost of Operations and Maintenance with the lease cost, making the solar installation and operation virtually worry-free.

As an environmental advocate for pretty much my entire life, the solar part of my work has been the most rewarding. I have been fortunate to meet amazing people in the nonprofit community who are serving in areas beyond my experience. They are making tremendous differences every day, helping me to think bigger and to grow my optimism. Some have been helping underserved communities for decades, and if I can help them improve their operating budgets… I can’t think of a better way to spend a day in the office.

And that Duke Energy Solar Rebate that I mentioned previously – the maximum nonprofit rebate of $75,000 far and away exceeds the maximum rebate for the commercial sector ($30,000) and the residential sector ($6,000). The commercial and residential sectors understand the power of the solar rebate, claiming all of it in under three minutes during the final Duke Energy first come, first served solar rebate application window in 2020. Because of that overwhelming demand, Duke Energy moved to a twice a year lottery system in 2021. Unfortunately, year after year the nonprofit sector does not fully utilize their rebate allocation, and the allocation snowballs into the next calendar year’s allocation. If the nonprofit solar rebate allotment is not fully claimed by the end of 2022, it will be made available to the commercial and residential sectors in January 2023 for the final solar rebate opportunity. There is no expectation that the General Assembly will mandate this Rebate again.

I am hoping that if you know of a North Carolina nonprofit that could benefit from solar energy that you will forward this blog post to them. Solar Energy can be an easy decision – the financials either make sense or they don’t – and it is Eagle Solar & Light’s goal for the incentives to benefit nonprofits immediately.

 

Laura Combs is Eagle Solar & Light’s Business Development Director in North Carolina. She has a Master’s degree in Urban and Regional Planning, with a specialty in Environmental Planning. Laura is a former government and non-profit employee who worked to recover the endangered Florida manatee. She is very aware of the need for maintaining slim overhead and maximizing funds, and she is grateful for the opportunity to help protect the planet while helping people to reduce their carbon footprint and utility bills via solar energy installation.

 

The Monetary Incentives

I am helping a client take full advantage of federal solar incentives before 2021, when the federal Solar Investment Tax Credit drops from 26 percent to 22 percent, and I know other business owners are unaware of and will be interested in the change. The drop in the Tax Credit would result in a loss of over $5,000 in tax benefits for this client. If you want to get to the financial bottom line first, jump to “Let’s Add It Up” below.

Here is what I shared with my client regarding Federal Solar Incentives and what you should know too:

Incentive 1: The federal REAP Grant (Rural Energy for America Program) is available to more businesses than most people would guess. If you are 1) an agriculture producer or 2) a business owner of any type whose business is in an area of population less than 50,000 and meets certain generous size criteria, the REAP Grant can pay for up to 25 percent of your solar installation. There are two grant cycles. For the 2021 federal fiscal year, the deadline for Cycle 1 (grants of no more than $20,000) is November 2, 2020, and the deadline for Cycle 2 (maximum grant of $500,000) is March 31, 2021. You can learn more here about REAP Grant qualifications: Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants. The REAP Grant is the first federal incentive that I recommend investigating.

Incentive 2: The Federal Solar Investment Tax Credit allows you to deduct 26 percent of the cost of your solar system in 2020. It is a dollar-for-dollar deduction. If 26 Percent of your system cost is $40,000, then you can deduct $40,000 directly from your taxes. This tax credit reduces to 22 percent in 2021 and then 10 percent from 2022 forward. You can Safe Harbor this tax credit by putting 5 percent down on a solar energy system before the end of 2020. You will then have a little over four years to construct the system. If you are unable to utilize the full 26 percent deduction in the first year, you can roll it over. If you are seeking a REAP Grant, be aware that if you put 5 percent down before your REAP Grant application is submitted and deemed complete then that 5 percent cannot be included in the tax credit. You can learn more about the tax credit here: Guide to the Federal Investment Tax Credit for Commercial Solar Photovoltaics.

Incentive 3: 100 Percent Bonus Depreciation (temporary – through 2022) allows the solar owner to write off 100 percent of the depreciation of the equipment in the first year. If you are unable to utilize the full amount in the first year, you can carry it backward to previous years or roll it forward to future years. Solar equipment must be placed in service by the end of 2022. The IRS provides additional information here: Tax law offers 100-percent, first-year ‘bonus’ depreciation.

Let’s Add It Up!

If you are a REAP Grant recipient, then up to 75 percent of your solar equipment and installation can be paid for via federal incentives.

If you are NOT a REAP Grant recipient, then up to 50 percent of your solar equipment and installation can be paid for via federal incentives.

When you add in the utility savings from solar energy production (30 to 60 percent of your bill, or more), your benefits are even greater.

Let’s Go!

Given these financials, the question becomes “Are you ready to dive in and see if solar is right for you?” Each state’s REAP Grant administrator is ready to help with the grant, and Eagle Solar & Light will help you secure the 26 percent tax credit and 100 percent bonus depreciation and install a power plant on your roof. A power plant that will begin saving money immediately and hedge against future utility rate increases.

Contact Eagle Solar & Light Here:

Alabama & Georgia – (205) 202-2208 or (800) 982-0808 Ext. 1
North Carolina – (800) 982-0808 Ext. 2
Email:Info@eaglesolarandlight.com

Laura Combs is Eagle Solar & Light’s Business Development Director in North Carolina. She has a Master’s degree in Urban and Regional Planning, with a specialty in Environmental Planning. Laura is a former environmental, non-profit employee who worked to recover the endangered Florida manatee, is very aware of the need for maintaining slim overhead and maximizing funds, and she is very grateful to bring her knowledge and skills to Eagle Solar & Light and its customers.

 

Investment Tax Credit and You

The Federal Solar Investment Tax Credit (ITC) is an alluring incentive given to the owners of photovoltaic systems in the United States. If you are a tax-paying citizen or business entity in 2020, 26% of the cost of your new system can be credited back to you on your federal tax return. The origin of the credit was a result of the Energy Policy Act of 2005. The goal of the credit is to incentivize clean, renewable energy in the United States as a way to combat pollution and global climate change. It has been a successful incentive, evident by the amount of installed photovoltaic systems increasing from 79 Megawatts in 2005 to 14,762 Megawatts in 2016.

Between 2006 and 2019, the ITC was at a strong 30%. At the start of 2020, it dropped by 4%. Unfortunately, it is set to drop even more unless Congress realizes that they are making a mistake by letting it die off. By 2021, the credit will be 22% and that will be the last year residential customers can utilize the incentive. Starting in 2022, only commercial customers can utilize a 10% credit on their system.

So let's do some quick math to understand the ITC better. Jim has decided to get an off-the-grid photovoltaic system on his house in 2020. The batteries in his system will only be charged by solar energy, allowing them to be included in the credit calculation. A contractor has quoted him $20,000.00 to design and build the system. Let's also say that Jim owes the Federal government $5,500.00 in taxes for 2020. If he decides to go through with the project, he would only owe $300.00 in taxes ($5,500.00 minus 26% of $20,000.00).

As you can see, the ITC has the potential to drastically reduce the payback period for a photovoltaic system by saving the owner money when tax season comes around. Although there are conflicting opinions as to whether this is the right way to incentivize solar energy, it does seem to be working. So what is the point that I am trying to make? Go solar this year before time runs out! It is unlikely that Congress will be extending the ITC anytime soon. If you went in to the future and realized that a company's stock was selling for $500.00 per share in 2025 and only $5.00 per share in 2020, you would probably go back to 2020 and buy all of the stock that you could fit in your budget. This is a similar concept with a solar investment! The incentives and electricity bill savings you lock in now will be worth a lot more in the future when the incentives are non-existent and electricity prices skyrocket! So contact Eagle Solar and Light today if you are interested in getting a photovoltaic system and we will lock you in to the 26% ITC before time runs out.

by Steven Gambla, Eagle Solar & Light PV Associate

 

 

Solar Planning by Laura Combs

While the world is pausing to wait out Covid-19, those of us not on the front lines have time to think a bit more deeply about our next steps. And it seems that the Earth is getting a bit of a breather too. Interestingly, here is the European Space Agency’s video compilation showing the changing air pollution levels in China this year:

Nitrogen Dioxide Emissions December 20, 2019 - March 16, 2020.

While many people are working from home and thinking about how to improve or retool their businesses,  churches, schools or non-profits, this is a good time to take a look at solar and how it can save you money, increase resilience, and reduce your carbon footprint to help decrease the impact as seen in the Space Agency’s video.

Churches, Non-Profits and Schools

North Carolina adopted a law (HB 589) in 2017 that created a solar rebate and clarified the rules around third-party leasing. The rebate can be up to $75,000 depending on the system size and can be applied to a solar lease or a purchase. Duke Energy customers such as churches, nonprofits, and other tax-exempt entities like schools and municipalities, can take advantage the rebates until 2023.

Choosing whether to lease or purchase a solar system is guided by the individual analysis of each organization’s financial goals. Leasing, when coupled with the Rebate, is generally the preferred financial option for tax-exempt organizations because it does not require significant additional resources outside of the operational budget. Organizations love the hassle-free leasing option because Eagle Solar is responsible for the operations and maintenance during the lease term!

Companies

Companies can take advantage of the Rebate, but the program is first come, first served and the designated rebate amount is claimed within hours of being made available in January of each year due to intense corporate demand. Fortunately, businesses often choose to go green without the Rebate as the financials of solar still compare favorably!

There are several reasons for this, and a critical piece of those factors are the tax incentives for businesses. The federal government created an incentive to make solar purchasing easier via the federal Investment Tax Credit, or ITC, as well as accelerated depreciation of the asset. These tax incentives can equal up to 50% of the cost of solar installation. Organizations that are considering solar purchases should act in 2020, when the ITC enables them to deduct 26 percent of the cost of installing solar systems. This incentive will be reduced to 22 percent in 2021 and then permanently set at 10 percent in 2022.

If a business does not have the tax liability to fully monetize these tax benefits, a lease, as described above, can be a great option. The business can lease a system from Eagle Solar and immediately get both the financial and environmental benefits of solar without paying the full cost of the system.

Leasing or Purchasing Solar – Which is the right choice?

Eagle Solar performs an in-depth analysis of your organization’s energy use, building orientation and surroundings, and available incentives to help determine whether leasing or purchasing a solar system is most cost effective. We provide that analysis to you, along with our recommendation. {We view our role as solar facilitators- not sellers- as we want to be a trusted advisor.}- So you can expect us to tell you when the system does and does not make financial sense.

When you are ready to see if solar is a fit, please give me a call at (919)275-2245 or email at lcombs@eaglesolarandlight.com.

Wishing you all strong health during these difficult times.

Sincerely,

Laura Combs

 

One of the greatest parts of working in the solar industry is the people that you meet. As our work in North Carolina has expanded, we have been thrilled to learn about the Community Purchasing Alliance (CPA). The Community Purchasing Alliance has changed the way that schools and churches think about their utilities, service contracts and vendor relationships. They are helping non-profits stretch their limited time and financial resources.

Felipe Witchger, Founder and Executive Director of the CPA is a visionary with a passion for helping non-profits focus on their mission and extend their resources. Hear Felipe speak at our upcoming “Save Money and Make a Difference!” Nonprofit Sustainability Event March 20th in Durham, NC! Click here to register. You will learn about how non-profits are making their dollars go farther with CPA’s innovative financing model and other pertinent topics.

Community Purchasing Alliance and Bulk Purchasing of Critical Services

The CPA negotiates significant savings for their non-profit members by negotiating contracts and vendor relationships that wouldn’t be available otherwise. Solar energy, Heating, Ventilation, Air Conditioning (HVAC) services, and printers are all products that CPA has facilitated special pricing arrangements for its cooperative members.

The Community Purchasing Alliance: Saving Money for Non-Profits The Community Purchasing Alliance: Saving Money for Non-Profits eaglesolar March 13, 2019 Renewable Energy / Sustainability One of the greatest parts of working in the solar industry is the people that you meet. As our work in North Carolina has expanded, we have been thrilled to learn about the Community Purchasing Alliance (CPA). The Community Purchasing Alliance has changed the way that schools and churches think about their utilities, service contracts and vendor relationships. They are helping non-profits stretch their limited time and financial resources. Felipe Witchger, Founder and Executive Director of the CPA is a visionary with a passion for helping non-profits focus on their mission and extend their resources. Hear Felipe speak at our upcoming “Save Money and Make a Difference!” Nonprofit Sustainability Event March 20th in Durham, NC! Click here to register. You will learn about how non-profits are making their dollars go farther with CPA’s innovative financing model and other pertinent topics. Community Purchasing Alliance and Bulk Purchasing of Critical Services The CPA negotiates significant savings for their non-profit members by negotiating contracts and vendor relationships that wouldn’t be available otherwise. Solar energy, Heating, Ventilation, Air Conditioning (HVAC) services, and printers are all products that CPA has facilitated special pricing arrangements for its cooperative members. See How Temple Sinai Benefitted from Solar through the CPA CPA successfully negotiated $16.9 million of bulk purchase agreements in 2018 for a total of $1.5 in savings for its members. These bulk-purchase arrangements are driven by specific needs and opportunities for savings, and these final agreements are the result of robust financial analysis, intensive due diligence, and significant input from the coop members on their most pressing needs. For example, CPA and its members determined that it could save 10-30% on HVAC services through a bulk-purchased contract. CPA is replicating this successful model in the Research Triangle Park area now, after significant success in Washington DC.

Learn more about the CPA and Solar Power for Nonprofits

Join us in Durham at Clouds Brewing to learn more about how your nonprofit can raise more money and save money. This event is going to focus on a variety of strategies that nonprofits can employ to get the most out of every dollar. Reserve your spot today! When: March 20th, 5:30-7:00 pm Where: Clouds Brewery, 905 West Main Street #22, Durham, NC 27701

Solar ITC Step Down Explained

Solar PV system owners will have until the end of 2020 to qualify for the 26% Solar Investment Tax Credit (ITC) before it steps down again.

The ITC has proven to be the most influential and important Federal policy to incentivize the solar industry’s growth since its introduction. Now that the tax credit is going to step down it is going to shake up the industry a bit. Despite the inevitable step down, the solar industry is positioned to continue its growth trajectory.

History

The Solar ITC came to fruition in 2005 under the Energy Policy Act of 2005 creating a 30% ITC for residential and commercial solar energy systems. The original bill contained various tax incentives that supported energy efficient and sustainable technologies. The Solar investment tax credit became part of the package, initiating the growth of solar in the United States. The ITC was originally set to last two years but was extended in three separate bills.

Timeline

  • 2005: Energy Policy Act of 2005 starts 30% investment tax credit for residential and commercial solar
  • 2006: Tax Relief and Health Care Act of 2006 extends tax credits for an additional year
  • 2008: Emergency Economic Stabilization Act included an eight-year extension of the residential and commercial ITC
  • 2015: Omnibus Appropriations Act included a multi-year extension of the residential and commercial ITC and changed the previous “placed-in-service” standard qualification for the credit to a “commence construction” standard for projects completed by the end of 2023. The step down to 10% for commercial solar only takes effect in 2023 and beyond.

Overview of Step Down

Originally the ITC rewarded new solar PV system owners 30% of a project’s install cost if begun in 2019. The ITC reduced to 26% in 2020, 22% in 2021, and down to 10% in 2022 where is will remain only for utility and commercial projects. In 2022, homeowners lose the ability to collect a solar tax credit. This chart below visually explains the step down:

Stepping down the ITC graph

The Solar ITC since its originality has seen a few extensions in its life time. The solar industry itself is in a much stronger position than before when the ITC faced elimination back in 2008. In the past years the prices for solar equipment has plummeted allowing for customers in every sector to be able to afford PV systems. At the same time state, city, and local municipalities have set high renewable energy targets. In addition, lucrative financial structures are in place for corporations to take advantage of in order to fill their sustainability initiatives. All in all, solar is here to stay with or without the ITC.  Our team comprised of solar experts capable of handling any sized project from an off-grid cabin to a over-sized commercial project and beyond. Contact one of our representatives at (205) 202-2208.