What if your business could lower electricity costs, stabilize long-term energy expenses, and increase its property value—all at once? That’s exactly what solar energy makes possible. In North Carolina, the cost of commercial solar panel installation has dropped significantly over the past decade, making solar a financially viable option for more companies.
From tax credits and rebates to loans and lease models, these options can ease the upfront financial burden while offering lasting economic benefits.
Federal Solar Investment Tax Credit (ITC)
One of the most valuable incentives available is the Federal Investment Tax Credit (ITC). It allows businesses to deduct 30% of the total solar installation cost from their federal tax bill. This includes not only the solar panels but also labor and related equipment costs.
What makes this especially helpful is the rollover feature. If your business can’t use the entire credit in one year, you can carry the unused portion forward. This makes the ITC an excellent tool for businesses with steady or growing tax liabilities.
Accelerated Depreciation and Bonus Depreciation
Beyond the ITC, solar systems also qualify for depreciation benefits through the Modified Accelerated Cost Recovery System (MACRS). This allows businesses to write off the system’s value over a five-year period, reducing taxable income year by year.
Additionally, bonus depreciation lets businesses deduct a larger share of the system’s cost in the first year. When combined with the ITC, these benefits can lower the net system cost by up to 50% or more in year one alone.
North Carolina Utility and Local Incentives
Although North Carolina no longer provides a state-level solar tax credit, the state offers other valuable programs to help reduce costs. One of the most important is the property tax exemption for renewable energy systems. This ensures that adding solar panels won’t increase your property tax assessment.
Some utilities, like Duke Energy, provide solar rebate programs for eligible commercial customers. These rebates are often based on system size and can save businesses thousands of dollars. Additionally, some municipalities and electric cooperatives offer low-interest loan programs or localized incentives, further reducing the financial barrier to entry.
PACE Financing
In certain regions of North Carolina, Property Assessed Clean Energy (PACE) financing is available. This model enables businesses to pay for solar systems through a special charge added to their property tax bill.
What sets PACE apart is its long repayment term—up to 20 or 25 years—which makes solar more affordable by spreading the cost over time. Plus, the obligation stays with the property. If you sell the property, the repayment continues under the new owner, while they benefit from the ongoing energy savings.
On-Bill Financing Options
Some North Carolina utilities offer on-bill financing, allowing businesses to repay the solar system cost through their regular utility bill. This method is simple and requires no separate loan or third-party lender.
The key advantage is that monthly energy savings often offset the repayment amount, keeping cash flow neutral or even positive. This model is especially useful for small to mid-sized businesses seeking a low-risk, manageable path to solar.
Loans and Solar Financing Firms
Numerous lenders and financing firms now offer loan products specifically tailored for commercial solar installation North Carolina. These include:
- Term Loans: Fixed monthly payments over a set period.
- Solar Equipment Loans: Designed exclusively for solar purchases, with competitive rates.
- USDA REAP Loans: For agricultural businesses and those in rural areas.
These financing tools allow your business to retain ownership of the system and claim all associated tax and depreciation benefits. Some lenders even offer performance-based loan structures, where repayment aligns with actual energy production and savings.
Leases and Power Purchase Agreements (PPAs)
Not every business wants to own a solar system. If you prefer a simpler model, a lease or PowerPurchase Agreement (PPA) may suit your needs. In a lease, you pay a fixed monthly fee to use the system. With a PPA, you purchase the electricity the system generates, usually at a lower rate than your utility charges.
Since the third-party provider retains ownership, they handle maintenance and system performance. However, one downside is that your business won’t receive the federal tax credit or depreciation advantages. Still, this approach works well for companies seeking zero upfront costs and hassle-free energy savings.
How to Choose the Right Financing Option
Every business has unique needs. Choosing the best financing model depends on several key factors:
- Tax Liability: Can you fully use tax credits and depreciation deductions?
- Capital Availability: Do you want to purchase outright or finance the project?
- Location Stability: Will your business stay in the current property for the next 10+ years?
- Ownership Preference: Are you comfortable with system maintenance and management?
Consulting with a solar financing expert or installer can help you answer these questions and determine the most suitable option for your business.
Calculating the True Cost and Return on Investment (ROI)
Let’s explore a simplified example. Suppose a business installs a 100-kilowatt solar system at a cost of $200,000. Here’s how that might look after incentives:
- Federal ITC (30%): -$60,000
- MACRS and Bonus Depreciation: -$50,000 (approximate tax benefit)
- Utility Rebate: -$20,000
Net Cost: Around $70,000
If the system delivers annual energy savings of $15,000 to $20,000, the payback period would be roughly 4 to 6 years. Over 25 years, total energy savings could reach $400,000 or more, turning a one-time capital project into a long-term financial asset.
Begin Your Transition to Solar—Financing Is Easier Than You Think
The cost of commercial solar panel installation in North Carolina continues to become more affordable. With access to federal tax incentives, depreciation benefits, utility rebates, and creative financing models like loans, PPAs, and on-bill repayment, there’s truly a solution for every business.
Still wondering what financing options are available for businesses looking to install solar panels? Whether you’re ready to buy and maximize tax benefits or prefer a no-cost, low-risk lease, there’s a clear financial path forward.
Contact a qualified solar provider today to assess your property, compare financing models, and start building an energy-efficient, cost-saving future for your business.
