There are several types of incentives that can help reduce the cost of installing solar at your business: cash incentives, tax credits and depreciation and special grants.
Energy Trust cash incentives
Energy Trust offers cash incentives that reduce the upfront cost of solar installations. The incentive amount depends on the size of your system and your electric utility. To learn more, request a proposal from a solar trade ally contractor or explore our solar planning tools.
||Incentive by system size
|Portland General Electric
||0-20 kW: $1.00/watt
21-300 kW: $1.00-$0.50/watt*
||0-15 kW: $1.00/watt
16-300 kW: $1.00-$0.40/watt*
*Non-linear incentive rate calculation.
Estimate the incentive for a particular system size.
Incentives are subject to funding availability and may change at any time. Check with your contractor.
Energy Trust limits how much solar electric incentive funding a single customer may apply for in a single calendar year. These limits are applied by utility and are currently $330,000 per year for customers of PGE and $400,000 per year for customers of Pacific Power.
Solar for New Commercial Construction: If you are considering solar for a new commercial building that is in the design phase, Energy Trust can provide assistance with preliminary scoping and design. Take a look at our Early Solar Assistance pages for more information.
Tax credits & deductions
A tax credit is a dollar-for-dollar reduction of the income tax you owe. The federal government offers a corporate tax credit and a special depreciation schedule for businesses that install solar energy systems. Nonprofit organizations and public entities are generally not able to use these benefits because they do not pay taxes.
Consult your tax professional to learn how tax credits and rules may apply to you. This information does not constitute tax advice and cannot be used to avoid tax penalties.
Federal Energy Tax Credit: This federal tax credit covers 30 percent of the cost of a solar electric system installed before December 31, 2016. View requirements and information on how to claim the tax credit.
Federal Accelerated Depreciation: Businesses may depreciate the cost of a solar electric system following the five-year Modified Accelerated Cost Recovery System. Claiming accelerated depreciation can provide a tax deduction benefit that offsets up to 25 percent of the cost of the installation. The five-year depreciation schedule can be found in the most recent version of IRS Publication 946.
There are some federal, state and local grants available for solar projects that may be combined with Energy Trust incentives. Most grants use a competitive solicitation process to award funding. Read the application requirements carefully before proceeding.
Energy Trust provides technical assistance and financial incentives but does not develop, sell or install energy systems or equipment. This work is done by independent businesses that are solely responsible for the quality and performance of their installations.
To qualify for Energy Trust cash incentives for solar:
- You must be an Oregon customer of Portland General Electric or Pacific Power.
- If you are not a customer of PGE or Pacific Power, please visit www.solaroregon.org to learn if your utility provides incentives for solar.
- Systems must be installed by an approved Energy Trust solar trade ally contractor. Self-installed systems do not qualify.
- Incentive applications must be approved by Energy Trust prior to installation (your contractor will submit your application on your behalf).
- Systems must be grid-tied and net metered.
- All system components must be new.
- Additions to existing solar electric systems are allowed but may be subject incentive caps.
- Large commercial electricity users who “self-direct” the renewable energy portion of their public purpose charge may receive a reduced incentive. Learn more about self-direction in our FAQ.
- Projects participating in the Oregon feed-in tariff pilot (also referred to as the Solar Payment Option or Volumetric Incentive Rate program) are not eligible for Energy Trust incentives.
Incentives are not intended to influence consumer decisions on fuel sources.
1. Get proposals from several Energy Trust solar trade ally contractors.
2. Choose your system size using information from your proposals.
3. Sign a contract with your installer. Your contractor will submit your Energy Trust incentive application on your behalf. Your may opt to receive your Energy Trust incentive directly or have it paid to your contractor.
4. Sign a net metering agreement with your electric utility. Your contractor will provide the form.
5. Your contractor installs your system. The installation timeline for your project will depend on your system size and your contractor’s availability. Most commercial projects are completed within a few months of contracting.
6. Energy Trust mails your incentive check to you or your contractor, depending on the option you selected on your incentive application.
7. Claim your federal energy tax credit when you file your taxes. Complete the IRS Business Energy Investment Tax Credit Form and submit it with your federal tax return.
8. Enjoy your clean, free, renewable energy for years to come.
Schools, municipalities and public agencies planning to use a public, competitive process to procure solar for an existing building can reserve solar incentives before hiring a solar trade ally. Email the solar team or call 503-546-3614 for more information about eligibility and how to submit the Solar Electric Preliminary Incentive Application for Existing Public Buildings: Form 206PE (Excel | PDF).
All required forms will be provided and submitted by your solar trade ally.
Energy Trust offers helpful resources for installing a solar electric system. Here are some great places to start:
Use our solar planning tools to explore how much a solar electric system might cost.
Read important tips for choosing a qualified solar contractor and comparing contractor bids.
Find out what net metering is and how it benefits system owners.
Solar water heating systems
Tools and other resources
Commercial solar financing: weighing your options
One of the biggest concerns of any business or non-profit considering solar is the upfront cost and how, or if, it should be financed. Currently, commercial property owners have three basic options: purchasing a system with cash or a loan, leasing a system or purchasing the electricity through a solar power purchase agreement.
Innovative, new financing solutions such as community solar funding or Property Assessed Clean Energy (PACE) programs are still evolving and aren’t readily available in our market.
Cash & Loans
If you have the capital, paying for a commercial solar system with cash will typically provide the highest return on investment and the quickest payback. A solar contractor can provide you a proposal with specific figures, but it’s not uncommon to achieve payback within 5 to 9 years.
As the purchaser of the system, you will be eligible to receive a cash incentive from Energy Trust, which typically covers approximately 20 percent of your upfront cost . You will also be qualified to claim a Federal Investment Tax Credit and the tax dedication from the Modified Accelerated Cost Recovery System. Together, these tax benefits can reduce your gross project cost by up to 55 percent.
These same advantages apply if you use a business loan to pay for some or all of your system. There are a number of lenders that offer financing specifically for solar.
Another option is to install a solar system using a lease. With some lease arrangements, there is little or no upfront cost to the business hosting the system. There are two common types of commercial solar leases: a capital lease and an operating lease.
A capital lease is similar to a long-term loan but it has a small buyout payment at the end of the term (often one dollar). You claim the incentives, the tax benefits and the energy savings from the electricity.
Under an operating lease, which is sometimes referred to as a true tax lease, the lessor effectively owns the solar electric system. You pay a monthly payment to the lessor in exchange for receiving the electricity and utility bill savings from the system. The lessor generally receives the Energy Trust incentive and claims the tax benefits. At the end of the term, there is an option to renew the lease, purchase the system at fair market value or remove the system.
Power Purchase Agreements
Under a power purchase agreement (PPA), an investor purchases, installs, owns and maintains the solar electric system. They provide any necessary financing and receive the incentives and tax benefits for which the project qualifies. In exchange, you purchase the electricity produced by the system for the duration of the agreement, usually 20 years in Oregon. The solar service provider pays for the equipment, installation and most necessary maintenance on the system.
The rate you pay for the solar electricity may be less than your current electricity rate. You benefit from slightly reduced utility costs (if your solar PPA rate is less than you utility rate) for the duration of the agreement. At the end of the term, you have the option to remove the system, renew the agreement or purchase the system.