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Solar for your Business

2-story office bldg with solar panel awningsSolar power is an investment in your business that will increase in value as energy costs rise. Your investment in a solar hot water unit or a solar electric unit on your leased or owned building may have a payback of as little as five years, with Energy Trust incentives, Oregon Business Energy Tax Credits (BETC) and federal tax credits.

Third-party Ownership Models

Third-party ownership models are being used more than ever as the Oregon solar industry matures. A third party ownership is a financial model where the solar photovoltaic or thermal system is owned by a separate business or investor than the building host or owner where it is installed. The arrangement allows the investor owner to utilize the tax credits and benefits available for the solar system (e.g. federal investment tax credit, Modified Accelerated Cost Recovery System, Oregon Business Energy Tax Credit) and sells the power produced by the system to the host entity.

This model has become attractive to governments, schools, and nonprofits who often have roof space and interest in solar power, but lack sufficient funding and tax credits to purchase solar systems outright. Investors have capital available for investment and the ability and desire to use tax credits, but lack roof space. Third-party ownership arrangements allow these two parties to work together to achieve their own energy or financial objectives.

For more information on third-party ownership models go to: http://energytrust.org/business/incentives/info/3rd-party-faq.aspx

Incentives and Tax Credits

There are a variety of incentives available to Oregon businesses that install solar. Government incentives are typically, though not always, provided as tax credits. State and local incentives are more likely to be cash rebates paid upon construction of the project or over time. In addition to direct incentives, there are other, indirect benefits, such as property tax exemptions and net-metering.

Incentives and tax credits are always subject to change. A good, central resource for up-to-date incentive information is the Database of State Incentives for Renewables and Efficiency (DSIRE).

NOTE: The following information on incentives and tax credits is not tax advice. You should consult with a tax professional to understand how tax credits may effect you.

Energy Trust of Oregon Incentives

Cash incentives are available from Energy Trust of Oregon for qualifying solar systems, but the incentives vary with demand.  The Energy Trust website features a  solar calculator that shows how their incentive works with the state and federal tax credit to bring down the cost of a solar electric installation. For current incentive rates, visit: http://energytrust.org/business/renewable-energy/

Oregon Energy Incentives Program

Oregon Department of Energy restructured its incentive program for businesses in 2012. For solar electric projects, they offer competitive grants. For solar water heating systems, the provide tax credits, and qualification depends on the project costs. For more details, visit http://www.oregon.gov/ENERGY/BUSINESS/Incentives.

Federal Investment Tax Credit

The federal government offers an investment tax credit for 30% of the cost to install your system, with no cap.  

Feed-in Tariff Pilot

In 2009, the Oregon legislature passed a law establishing a new solar incentive option in Oregon(feed-in tariff).Oregon customers of Portland General Electric, Pacific Power and Idaho Power can apply to be part of the program as capacity is available. Customers who opt to use this incentive are not eligible for Energy Trust incentives or a state incentive, though they can still claim the federal tax credit.

A feed-in tariff is an incentive program in which the electric utility pays the owner of a solar electric system a fixed premium rate for every renewable kilowatt-hour generated over a period of time. Those payments allow the owner to recoup their investment over time. This model has been used successfully in Germany.

For more information, visit the utility’s websites: