Whether your business has filed 2024 taxes or an extension, it’s not too early to think about 2025 taxes. As a business owner, you likely look for ways to save money and reduce your operating expenses. One approach to achieving these goals is to invest in renewable energy. Not only can you save on monthly electricity costs, but you can also take advantage of available 2025 commercial solar energy incentives that can significantly reduce your annual taxes.

Federal Incentives

The most considerable federal incentive available for businesses that invest in renewable energy is the Investment Tax Credit (ITC). This tax credit allows businesses to deduct 30% to 50% of the cost of a solar energy system from their federal taxes. In other words, if a company invests $1,000,000 in a solar energy system, they will be eligible for a tax credit of at least $300,000.

A second incentive is a depreciation law that allows businesses to write off 75% to 85% of the cost of a renewable energy system in 5 years. Falling under the Modified Accelerated Cost Recovery System (known as MACRS), it allows the capitalized costs on the solar asset to depreciate 75% to 85% of your project rather than the typical 50% to 70%.

State Incentives

Many states offer their own incentives for businesses that invest in solar energy. For instance, in Connecticut, companies installing solar energy systems can use the state’s Non-Residential Renewable Energy Solutions Program (NRES) to get cash payments from the local utility for twenty years. New Jersey has a similar program for 15 years.

New York offers an approximate 25% rebate upfront. 

Other states have similar programs designed to reduce the cost of investing in solar energy.

Check out the Database of State Incentives for Renewables and Efficiency to learn more about specific state offerings.

Take Advantage of 2025 Commercial Solar Energy Incentives

By taking advantage of both federal and state incentives, businesses can reduce their tax liability and save money while reducing energy bills and increasing property values.

If you want to discover more about what options are right for you and would like help navigating solar tax incentives for your business, reach out to us today. Our experts can guide you through assessing your energy needs and exploring financing options.

At Smart Roofs Solar, we’re passionate about helping organizations and businesses make the switch to clean energy. With our expertise, we can design a custom solar solution that meets your energy needs—just in time for the  coming year.