If you are considering installing solar power for your farm or agribusiness to reduce
your energy costs, you may be wondering if there are any incentives or financing options to help you get started. There are in fact many financing options and incentives for rural renewable energy systems that can not only save you money, but that can help you complete a number of small projects. Solar power is one of those renewable energy sources that are ideal for the rural small business or farm because it can allow you to reduce the cost of power to near zero, which can lower your production costs significantly. Here are a few of the incentives and financing options that can help with the cost of installing solar panels.
MACRS: Modified Accelerated Cost-Recovery System. This incentive allows you to recover the cost of your investment through depreciation deductions on your federal taxes. This is a really useful way to recover the cost of your investment through your taxes as it allows you to deduct a percentage of the cost each year from the taxes that you owe.
REAP: Rural Energy for America Program. This is a program that will provide grants or loan guarantees for the installation of renewable energy systems, including solar panels. It will cover the cost of energy audits, installation, or improvements. A loan guarantee is like having a cosigner for a loan you take out to install the system, while a grant is money that does not have to be repaid.
SARE: Sustainable Agriculture Research & Education. This program provides funding in the form of grants for different renewable and sustainable energy projects. Rural small businesses like farms and ranches can apply for grants to fund projects like the installation of on-farm renewable energy systems, which includes the installation of solar power systems.
Feed-In Tariffs: These incentives are designed to allow you to receive payment from the electric utility company for excess power that you generate and feed into the power grid. Rates for payment are generally different by state and based on market conditions, but this is a great way to make your solar power system work for you. It always great to get a check from the power company instead of a bill!
Property Tax Incentives: Many states offer incentives in addition to the federal tax incentive program under MACRS. Some states even allow you to exclude the value of your renewable energy system from your property taxes. Look into the incentives and programs offered by your state to learn more about the incentives offered in your area.