Approximately 10 years ago the US energy industry began its transformation to renewable sources which continues to prosper. Declining costs, commercial investments and consumer demand are some of the contributing factors to solar energy’s remarkable evolution in recent years. Consumers and businesses alike are choosing cleaner energy sources. So, what does the future hold for commercial solar in 2019?
The Future of the Investment Tax Credit.
Businesses are currently benefiting from a 30% tax credit on renewable energy systems and can expect to do so through the end of 2019. The energy investment tax credit program began in 2008 and was extended by the Energy Improvement and Extension Act of 2008 and further expanded by the American Recovery and Reinvestment Act of 2009. It was extended once again by Congress at the end of 2015 and is now in its step-down conclusion at the end of 2019.
•Through December 31, 2019 – 30%
•December 31, 2020 – 26%
•December 31, 2021 – 22%
•December 31, 2022 and into the future – 10%
Due to the Trump solar tariffs beginning their gradual reduction, the effects of the end of the investment tax credit will be subdued for at least a year or two.
What you can expect at the local level.
We can expect some governors to increase the percentage of renewables for their states. States can have a major impact on the solar industry in 2019 with federal policies taking somewhat of a back burner. We see an ever-growing desire from citizens to use cleaner, renewable energy sources and to support businesses and organizations that do the same. As you drive around, you will notice many solar farms and commercial solar installations. The bottom line is that we are seeing growing community activism for renewable energy leading to strong support and legislation from states and municipalities in an effort to provide citizens and businesses with the energy sources they desire.
Many corporations have joined RE100, a global, collaborative initiative led by The Climate Group in partnership with CDP, which brings together influential businesses committed to 100% renewable energy. Asset management companies are managing more commercial and industrial renewable projects along with community renewable projects. The driving force behind many of these investments can be attributed to consumer demand, falling costs and climate change goals.
Utilities and Renewable Energy
The largest purchasers of renewable energy have been the electric utilities. This is expected to continue since in many instances renewable energy is considered the most economical choice for utility-scale energy generation. Renewables are less expensive than coal and are now at the point where they are very much able to compete with gas. Combine this with falling costs and consumer demand are the reasons that many utilities are using more renewables as a source for their power generation.
The demand for solar is increasing at a rapid pace and we can expect to see much more of the same for commercial solar in 2019. Federal and state incentives will continue to exist and allow for considerable savings. Owning a commercial solar system is now a reality for many businesses and it is a guaranteed way to give yourself an environmentally responsible image and achieve energy independence. Infiniti Energy Services offers a number of solar solutions for commercial properties. To learn more about how solar power can benefit your organization, contact us today!