The Business Solar Tax Credit: Your 2025 Guide

Business leaders planning their company's solar tax credit strategy before 2025 deadlines.

When you think about the cost of going solar, your mind probably goes straight to the panels. But here's what many businesses miss: the federal solar tax credit covers much more than just the hardware. It's designed to include the entire cost of getting your system running, from equipment and installation labor to a battery backup system. For California businesses, understanding what qualifies is crucial for seeing your true return on investment. This guide breaks down exactly which expenses count toward the 30% credit, giving you the full financial picture to move forward with confidence.

Key Takeaways

  • The 30% tax credit is more than a panel discount: It's a dollar-for-dollar credit that applies to your total project cost, which includes installation labor, essential equipment, and even battery backup systems.
  • Use deadlines to your advantage: You can secure the current, more flexible tax credit rules by using safe harbor provisions. This means either starting construction or spending 5% of the project cost before key deadlines to lock in your benefits.
  • Stack your savings with depreciation: Beyond the tax credit, your business can also depreciate 85% of the solar system's cost. This powerful combination lowers your taxable income and improves the financial return of your solar investment.

How Can the Federal Solar Tax Credit for Businesses?

If you’re a business owner thinking about going solar, the Federal Solar Tax Credit is one of the most valuable incentives available. Also known as the Investment Tax Credit (ITC), this isn't just a simple deduction; it's a dollar-for-dollar credit that directly reduces the federal income tax you owe. Think of it as a significant discount on your solar investment, courtesy of the federal government.

This credit was designed to encourage businesses to adopt clean energy by making the initial investment more affordable. For commercial customers, this can dramatically shorten the payback period of a solar installation and improve your bottom line. Understanding how it works and what you need to do to qualify is the first step toward lowering your energy costs and gaining energy independence.

Breaking Down the 30% Tax Credit

The federal solar tax credit allows your business to claim 30% of your total solar installation costs. This generous 30% rate is available for all systems installed between 2022 and 2032, giving you a wide window to plan your project. So, what does this look like in practice? If your company invests $150,000 in a new solar energy system, you could receive a $45,000 credit, which directly lowers your federal tax liability by that amount. This makes high-quality solar solutions more accessible than ever and accelerates your return on investment.

The Base Credit: 6% vs. 30% for Large Projects

The 30% tax credit is the standard for most solar projects, but the rules change slightly depending on your system's size. For any system with an output under 1 megawatt (MW) AC, the base credit is a straightforward 30% of your total installation cost. This covers the majority of commercial installations. However, for larger commercial projects over 1 MW AC, the base credit starts at 6%. To reach the full 30%, your project must meet specific labor standards, which include paying a fair "prevailing wage" and using qualified apprentices. It's also possible to increase the credit even further with "adders," which are bonuses for meeting additional criteria.

Production Tax Credit (PTC) as an Alternative

For larger systems, there's another option besides the upfront Investment Tax Credit (ITC). It's called the Production Tax Credit (PTC). Instead of receiving a credit based on your installation cost, the PTC pays you for the electricity your system actually produces over its first 10 years of operation. The rate is around 2.6 cents for every kilowatt-hour (kWh) of energy generated, creating a steady, predictable income stream from your solar investment. Deciding between the upfront savings of the ITC and the long-term payments of the PTC is a strategic choice. Understanding our approach can help you see how we evaluate these options to find the best financial fit for your business.

Does Your Business Qualify for the Credit?

To take advantage of the ITC, your business needs to meet a few key requirements. First, you must file IRS Form 3468 with your annual tax return. The most critical factor is timing. To be eligible for the credit in a specific tax year, you must have "commenced construction" on your solar project before the end of that year. There’s also a deadline for completion. If your project begins by July 4, 2026, you have four years to finish it. These timelines make it essential to work with an experienced installer who understands the process, ensuring your project stays on track and qualifies for the full credit.

Ownership is Key: Leasing vs. Buying

When it comes to claiming the federal solar tax credit, one detail matters more than any other: you must own the system. Only the legal owner of the solar equipment is eligible to receive the credit. If your business decides to lease a solar system, the leasing company that owns the equipment gets the tax benefit, not you. While leasing might seem attractive due to lower upfront costs, purchasing your system ensures you reap the full financial rewards of your investment, including the 30% tax credit. Making the right choice between leasing and buying is a critical step, and our consultative approach is designed to help you weigh the long-term financial implications for your business.

Only New Equipment Qualifies

The IRS is clear on this point: the tax credit is for investments in new clean energy property. Used or refurbished equipment does not qualify for the credit. This rule is in place to encourage the adoption of the latest, most efficient technology and to ensure the long-term reliability of the nation's energy infrastructure. When you partner with an established installer, you can be confident that every component of your system—from the panels to the inverters—is new and covered by manufacturer warranties. This not only guarantees your eligibility for the tax credit but also provides peace of mind that your solar solution is built to perform for decades.

Special Rules for Tax-Exempt Entities: Direct Pay

Historically, tax-exempt organizations like non-profits, schools, and local governments couldn't take advantage of tax credits because they don't have a federal tax liability. The Inflation Reduction Act changed that with a provision called "direct pay." Now, these entities can install a solar system and receive the 30% credit as a direct cash payment from the IRS. This has made solar a financially viable option for a whole new range of commercial customers who want to lower their operating costs and meet sustainability goals. This option makes it possible for community-focused organizations to invest in clean energy and redirect savings toward their core missions.

How to Increase Your Credit with Bonus "Adders"

The 30% tax credit is a fantastic starting point, but the savings don't have to stop there. The Inflation Reduction Act introduced several "bonus adders" that can increase your total credit even further. These bonuses are designed to encourage specific goals, like supporting American manufacturing and investing in communities that need it most. For a California business, stacking these adders can make an already great investment even better. Understanding if your project qualifies for these extra percentages is a key part of maximizing your financial return, and it's something we carefully evaluate for every client.

The 10% Domestic Content Bonus

You can increase your tax credit by an additional 10% if your solar project uses American-made components. To qualify for this bonus, your project must meet specific criteria set by the government. All of the steel and iron used must be manufactured in the United States. Additionally, a minimum percentage of the other manufactured parts, like your solar panels and inverters, must also be sourced from U.S. manufacturers. This is where having an experienced partner who understands the entire solar installation process is a huge help, as they can work with the supply chain to ensure your project meets these important requirements.

The 10% Energy Community Bonus

Another 10% bonus is available for projects located in what the government defines as an "Energy Community." These are areas that have been historically dependent on fossil fuels, including communities with recently closed coal mines or coal-fired power plants, as well as certain "brownfield" sites—properties where past industrial use may complicate redevelopment. The goal is to drive clean energy investment into the areas most affected by the energy transition. Determining if your commercial property is in one of these designated zones can be complex, but it’s a valuable step that could significantly increase your tax credit.

The 10-20% Low-Income Community Bonus

This bonus adder is specifically targeted toward projects that benefit low-income communities, but it’s important to note that it generally applies to multi-family housing projects, not single-family homes or most commercial buildings. A 10% bonus is available for projects built in a low-income area or on Tribal land. The credit can increase to 20% if the project is part of a qualified low-income residential building program or if at least half of the financial benefits of the electricity produced go directly to low-income households. For developers in the housing sector, this incentive is a powerful tool that helps make projects more financially viable while ensuring the advantages of clean energy are accessible to everyone.

Critical Deadlines for the Business Solar Tax Credit

When it comes to tax credits, timing is everything. The federal government has set specific deadlines for the business solar tax credit, and understanding them is key to maximizing your return. For commercial customers, planning your project around these dates ensures you can claim the full credit you’re entitled to.

Think of these deadlines as a roadmap for your project. By knowing the key dates for starting and completing construction, you can work with your solar installer to create a timeline that fits your operational needs and secures your financial incentives. Let’s walk through the dates you need to know.

Understanding the Phase-Out Schedule

The good news is that the current 30% tax credit is here to stay for a while. Thanks to the Inflation Reduction Act, businesses have a clear, decade-long window to go solar and claim the full credit. Specifically, this generous 30% rate applies to any commercial solar project that is installed and placed in service between 2022 and the end of 2032. After that, the credit begins to phase out. For projects placed in service in 2033, the credit drops to 26%. In 2034, it steps down again to 22%. While you have plenty of time to plan, acting sooner means you start saving on energy costs earlier and lock in your return on investment before these changes take effect.

Why Your Construction Start Date Matters

Here’s the key date to circle on your calendar: July 4, 2026. To get the most flexibility, you need to start construction on your solar project by this date. When you meet this deadline, you get a full four years to complete the installation. This generous window gives you and your installation team plenty of breathing room to manage everything from permitting to the final inspection, all while locking in your eligibility for the tax credit. It’s the best way to ensure your project moves forward smoothly without a tight deadline looming over you.

What Is the Four-Year Completion Rule?

So, what happens if you start your project after July 4, 2026? The rules get a bit tighter. Any project that begins after that date must be completed and placed in service by December 31, 2027. The four-year completion window no longer applies, which means your timeline becomes much more compressed. This is a critical distinction for businesses in the planning stages. Factoring this completion deadline into your long-term strategy is essential, as it can influence everything from financing to your choice of equipment.

How the 5% Rule Protects Your Credit

For many businesses, the idea of starting "significant physical work" to meet a deadline can seem daunting. Luckily, there’s a provision that helps. For solar projects under 1.5 megawatts (MW), you can secure your eligibility by spending just 5% of the total project cost. This is known as the 5% rule, and it’s a great way to lock in the tax credit without having to break ground immediately. This flexibility is part of our approach to helping businesses plan their transition to solar in a way that makes financial sense.

Will New Sourcing Rules Affect Your Tax Credit?

The Business Solar Tax Credit is a fantastic incentive, but it's important to know that the rules are changing. Specifically, new guidelines around where your solar equipment is sourced will soon come into play. Understanding these changes now will help you plan your project effectively and ensure you can still take full advantage of the available credits. Let's walk through what you need to know about these new sourcing requirements.

What's Changing with Equipment Sourcing?

Starting in 2026, new rules will affect which projects are eligible for the tax credit. If your project begins after this date, it may not qualify if the equipment comes from certain prohibited countries, including China, Russia, and North Korea. This policy is designed to encourage the use of American-made solar equipment. While this supports domestic manufacturing, it could also mean higher project costs or potential delays if you don't plan ahead. Working with an experienced installer who understands these sourcing requirements is key to keeping your project on track and within budget.

How to Stay Compliant with Sourcing Rules

To prove your project has officially started and lock in the current rules, you need to meet specific guidelines. The requirements differ based on your project's size. For large solar projects (1.5 megawatts or larger), you must show that significant physical work has begun on-site. However, for smaller projects (under 1.5 megawatts), the original guideline still applies: you just need to show you've spent at least 5% of the total project cost. This distinction is important for all commercial customers to understand as you begin planning your solar investment.

How Sourcing Rules Affect Your Project Plan and Budget

These new rules also introduce a firm timeline you'll need to follow. If your solar project's construction starts after July 4, 2026, you must complete it by December 31, 2027, to qualify for the tax credit. This makes careful project management more important than ever. While these deadlines might seem tight, remember that even without the full tax credit, solar energy remains a smart financial move, especially as utility costs continue to rise. A well-defined project plan, like the one we create with our approach, will help you meet these deadlines and maximize your long-term savings.

What Solar Project Costs Are Covered?

When you hear "solar tax credit," you probably think of the solar panels themselves. But the good news is that the credit covers much more than that. The federal government designed the Investment Tax Credit (ITC) to cover the total cost of your solar project, making it a powerful tool for lowering your initial investment. This includes not just the equipment but also the labor and other related expenses.

Understanding exactly what qualifies can help you accurately budget for your project and maximize your savings. The credit is a direct, dollar-for-dollar reduction of the income taxes your business would otherwise have to pay. For commercial solar projects, this credit is a generous 30% of the total system cost. Let’s break down which expenses are eligible, so you can feel confident about your move to solar energy.

Qualifying Solar Systems and Components

The tax credit is comprehensive, covering all the essential parts of your solar energy system. This includes the solar panels, the inverter that converts solar energy into usable electricity, and the mounting equipment that secures the panels to your roof or property. All the wiring and electrical components needed to connect the system to your building and the grid are also covered.

Even better, if you decide to include a battery backup system to store excess energy and protect your business from outages, those costs are eligible for the credit too. In some cases, if your roof needs repairs or reinforcement to support the solar panels, a portion of those roofing costs may also qualify. It’s all about what’s necessary to get your solar system up and running.

Other Eligible Clean Energy Technologies

While solar is often the main focus, it’s good to know that the federal tax credit supports a wider range of clean energy projects. The credit isn't limited to just solar panels; it also applies to other technologies like small wind turbines, geothermal heat pumps, and fuel cells. This gives your business more options for reducing its carbon footprint and energy costs. Just like with solar, your business can claim 30% of the total installation costs for these systems. This generous rate is available for any qualifying project installed between 2022 and 2032, giving you a long runway to plan your company’s transition to sustainable energy.

Specific Requirements for Equipment

To ensure your project qualifies for the tax credit, the equipment you install must meet a few specific requirements. The most important rule is that the expenses must be for new clean energy property; used or refurbished equipment doesn’t count. According to the IRS, qualified items include solar panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and battery storage technology. Some equipment has additional certification standards. For instance, solar water heaters must be certified by the Solar Rating Certification Corporation, and geothermal heat pumps must meet Energy Star requirements. This is where working with an experienced team pays off. We handle all the details of sourcing compliant, high-quality equipment, so you can be confident your project meets all the guidelines for the tax credit.

Does the Credit Cover Installation and Labor?

The 30% tax credit applies to the full cost of your solar installation, which is a huge benefit for your bottom line. This means both the price of the physical equipment and all the associated labor costs for design, assembly, and installation are included. The federal government offers this incentive to help businesses like yours manage the upfront cost of switching to clean energy.

This significant credit is available from 2022 through 2032, giving you a wide window to plan your project. By covering nearly a third of the total expense, the tax credit makes investing in commercial solar solutions a much more accessible and financially sound decision. It shortens the payback period and improves the long-term return on your investment from day one.

How to File with IRS Form 3468

Claiming the solar tax credit is a straightforward part of your annual tax filing process. To receive the credit, your business will need to file IRS Form 3468, Investment Credit, along with your federal tax return. It’s a standard procedure, but it’s important to get the timing right.

To be eligible for the credit in a specific tax year, your business must have started construction on the solar project before the end of that year. This is why planning your project timeline is so critical. While the form itself is manageable, we always recommend working with a tax professional to ensure everything is filed correctly. Our team can also walk you through the process as part of our approach to ensure a smooth and successful project from start to finish.

Claiming in the Year of Installation

One of the best parts about the business solar tax credit is how quickly you can benefit from it. You can claim the full 30% credit for the tax year in which your project's construction begins, even if the installation isn't finished by the end of the year. This means if your project kicks off in November, you can apply that credit to the same year's taxes, directly reducing your liability sooner rather than later. To make the claim, your business will file IRS Form 3468 with your annual federal tax return. This immediate financial relief is a key reason why solar is such a smart investment for commercial customers, as it helps improve your cash flow right from the start of your project.

Using Your Tax Credit and the Recapture Rule

Claiming the 30% tax credit is a major financial win for your business, but it’s also important to understand the long-term implications. Two key questions often come up after the initial excitement: What happens if the credit is larger than your tax bill, and what are your obligations if you sell the property? Thinking through these scenarios is part of a smart financial strategy. It ensures you not only get the maximum benefit from your solar investment but also remain compliant with IRS rules down the road, protecting your return on investment for years to come.

What if the Credit Exceeds Your Tax Liability?

It’s a great problem to have: your solar tax credit is so large that it’s more than what your business owes in federal taxes for the year. For example, a $150,000 solar project yields a $45,000 credit. If your tax liability is only $30,000, you can use the credit to wipe out that bill completely. But what happens to the remaining $15,000? You don’t lose it. The IRS understands that business income can fluctuate, so they’ve built in flexibility for situations just like this, ensuring you get the full value of the incentive.

The federal government allows you to handle the excess credit in two ways. You can carry the unused portion of the credit back three years to amend previous tax returns and receive a refund. Alternatively, you can carry it forward for up to 22 years to apply against future tax liabilities. This carryforward provision is especially valuable for commercial customers, as it provides a long-term financial tool that you can use as your business grows and your tax situation changes. It guarantees that the full 30% credit works for you, no matter your tax bill in a single year.

The 5-Year Recapture Rule: What You Need to Know

The government provides the solar tax credit to encourage long-term investment in clean energy. To ensure businesses hold up their end of the bargain, the IRS has a provision known as the recapture rule. This rule states that you must keep your solar energy system in service for at least five full years to retain the full tax credit. If you sell the property or stop using the system within that five-year window, you may have to repay a portion of the credit you received. It’s a critical detail to be aware of as you plan for your business’s future.

The amount you might have to repay decreases for each full year you own the system. The recapture is calculated on a sliding scale: if you sell within the first year, you’d owe back 100% of the credit. After one full year, that drops to 80%, then 60% after the second year, and so on. Once you pass the five-year mark, the credit is fully yours, and you owe nothing back, even if you sell the property. Understanding this timeline is a key part of the long-term financial planning we discuss with clients as part of our approach to every project.

How to Protect Your Credit with Safe Harbor Rules

When tax laws change, it can feel like the goalposts are always moving. That’s where “safe harbor” rules come in. Think of them as a way to lock in the current, favorable tax credit rules for your solar project, protecting you from stricter requirements that may come later. By taking specific actions now, you can secure the 30% tax credit under today’s guidelines, even if your project takes a few years to complete.

For commercial customers, understanding these rules is key to maximizing your return on investment. The two primary ways to qualify for safe harbor are by starting construction before key deadlines or by meeting certain spending thresholds on your project. Both paths require careful planning and documentation, but the effort is well worth it to ensure you get the full financial benefits you’re counting on. Let’s walk through exactly what you need to do to protect your credit.

Start Construction to Lock In Current Rules

The most straightforward way to secure the current tax credit rate is to get your project started. If your solar installation begins construction by July 4, 2026, you’re in the clear. Starting construction by this date locks you into the current rules, and from there, you have a generous four-year window to finish the project. This gives you plenty of time to manage the installation process without rushing.

"Starting construction" doesn't mean the entire system has to be up and running. It simply means that significant physical work has begun on-site. By planning ahead and beginning your solar solutions project before the deadline, you can confidently move forward knowing your tax credit is secure.

Meet Spending Thresholds and Keep Good Records

Another way to qualify for safe harbor is by meeting a minimum spending requirement. For most small to medium-sized projects (under 1.5 MW), you can lock in the credit by spending at least 5% of the total anticipated project cost. This is known as the 5% rule, and it’s a great option if you can’t begin physical work right away. You can use our estimate calculator to get a sense of your total project cost.

For larger projects (1.5 MW or more), you’ll need to demonstrate that significant physical work has started on-site. Whichever path you take, documentation is your best friend. Keep meticulous records of every invoice, contract, and payment to prove you’ve met the requirements.

Proving Physical Work on Your Project

So, what counts as "significant physical work"? This means more than just preliminary site clearing. It involves substantive, on-site construction activities that are integral to the project. It’s also important to consider where your equipment comes from, as new sourcing rules are on the horizon. Projects that start in 2025 can use equipment from any country. However, projects beginning in 2026 may not qualify for the credit if they use too much equipment from prohibited countries.

This is also true for energy storage. The 30% tax credit for battery backup systems continues until 2033, but these new sourcing rules will apply. Planning your project timeline and supplier choices now will help you stay compliant and protect your investment.

Extra Solar Incentives for California Businesses

The federal tax credit is a fantastic starting point, but the financial benefits of going solar for your business don’t stop there. California businesses, in particular, have access to additional advantages that make switching to solar an even smarter financial move. When you combine these perks, you can significantly reduce the initial investment and secure predictable energy costs for years to come. Let's look at how you can stack these benefits to get the most out of your solar project.

Finding California-Specific Rebates

The biggest financial incentive on the table right now is the 30% federal tax credit. It’s a direct, dollar-for-dollar reduction of the income tax you owe. However, it's important to know that new regulations could reduce this credit for many future projects. Acting now helps ensure you can claim the full 30% benefit. For California commercial customers, locking in this rate can make a huge difference in the overall cost and return on your investment, making this the perfect time to start planning your switch to clean energy.

How Rebates and Subsidies Affect Your Credit Calculation

While the 30% tax credit applies to your total project cost, it's important to know that some financial incentives can change your final calculation. Before you apply the 30% credit, you need to subtract the value of certain rebates and subsidies from your total cost. For example, any subsidy you receive from your public utility company must be deducted. The same goes for rebates from the equipment manufacturer or seller, which are essentially treated as a discount on the purchase price. The good news is that most state-level incentives don't need to be subtracted, but it's always best to confirm. Getting this right ensures you accurately calculate your tax credit and understand the true return on your investment.

How to Use Depreciation to Save More

On top of the tax credit, your business can also benefit from depreciation. Think of it as a way to write off the cost of your new solar system over time. Here’s the best part: you can claim the 30% tax credit and still deduct 85% of your project’s cost through depreciation. This powerful combination allows you to substantially lower your taxable income, which frees up capital you can reinvest into your business. It’s a dual financial advantage that makes our solar solutions an even more compelling asset for your company’s bottom line.

Calculate Your Long-Term Energy Savings

While tax incentives provide immediate relief, the long-term savings are where solar truly shines. Energy prices are unpredictable and tend to rise over time. By generating your own power, you protect your business from these future rate hikes and gain control over one of your most significant operating expenses. This proactive step leads to substantial savings year after year, turning your roof into a revenue-generating asset. You can get a clearer picture of what this looks like for your business by using an estimate calculator to project your potential long-term energy savings.

Your Action Plan to Secure the Solar Tax Credit

Alright, let's turn all this information into a concrete plan. Getting the full 30% tax credit comes down to smart planning and taking the right steps at the right time. Think of this as your checklist for making sure you don't leave any money on the table. With a clear strategy, you can confidently move forward with your solar project and secure the savings your business deserves.

Plan Your Project Timeline for Maximum Savings

Timing is everything when it comes to this tax credit. The rules are changing, but there’s a clear window to get the full 30% rate. The key is to aim to start construction by June 2026 or have your system fully operational by the end of 2027. If your project gets underway by July 4, 2026, you have a generous four-year window to complete it. Planning your project now puts you in the best position to meet these deadlines without rushing. A well-thought-out timeline helps ensure your transition to commercial solar is smooth and financially rewarding.

How to Find the Right Solar Installer

You don't have to figure this out alone. Partnering with an experienced solar installer is one of the smartest moves you can make. A great team will do more than just put panels on your roof; they’ll guide you through every step of the process. They stay on top of the latest policy changes and ensure your project meets all the requirements for the tax credit. When you work with experts, you can focus on your business while they handle the complexities of your solar installation, making sure you get the maximum savings possible.

Avoid These Common (and Costly) Mistakes

A few simple missteps can jeopardize your tax credit, so let’s talk about what to avoid. The most common mistake is simply missing the deadlines. Another is not understanding the "safe harbor" rules. You can lock in the current tax credit rate by either starting significant physical work or spending at least 5% of your project costs on equipment by the end of 2025. This protects you from future rule changes, especially around equipment sourcing. Documenting everything is also key. A clear project approach with records of your start date and expenses will make filing for the credit much easier.

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Frequently Asked Questions

Is this tax credit just a regular business deduction? Not at all, it’s much better. A deduction simply lowers your taxable income, but a tax credit is a dollar-for-dollar reduction of the actual federal income tax you owe. For example, if your business owes $50,000 in taxes and you have a $45,000 solar tax credit, your new tax bill is just $5,000. This makes it a far more powerful financial tool for reducing your tax liability.

What if I can't start physical construction on my project right away? You still have a great option. For most commercial projects, you can secure your eligibility for the current tax credit rules by spending just 5% of the total anticipated project cost. This is often called the "5% rule" or a safe harbor provision. It allows you to lock in the benefits now, giving you more flexibility to begin the actual on-site work when it makes the most sense for your business operations.

Does the tax credit cover more than just the solar panels? Yes, it’s designed to be comprehensive. The 30% credit applies to the total cost of getting your system running. This includes all the major hardware like panels, inverters, and mounting racks, as well as the labor for design and installation. It also covers the cost of a battery backup system and, in many cases, can even apply to necessary roofing work done to support the solar installation.

How do the new rules about where equipment is made affect my project? Starting in 2026, new sourcing guidelines will take effect. These rules may prevent projects from qualifying for the credit if they use equipment from certain prohibited countries. The best way to handle this is to plan ahead. By starting your project before these rules kick in, you can avoid any potential sourcing complications. Working with an experienced installer ensures your project plan and equipment choices keep you compliant.

Besides the tax credit, how else does solar save my business money? The tax credit is just the beginning. Your business can also take advantage of accelerated depreciation, allowing you to deduct 85% of your system's value from your taxes. This provides a second major tax benefit. Beyond that, generating your own electricity gives you control over a major operating expense, protecting your business from rising and unpredictable utility rates for decades to come.