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Since 2015 SolarKal has been accelerating the adoption of commercial solar energy by standardizing solar procurement. Now, as the solar advisory and procurement industry leader, we manage solar procurement for over 500M square feet of commercial real estate. This depth and breadth of experience enables our CEO, Yaniv Kalish, to provide a seasoned perspective on the potential impact of political change on commercial solar development.
With over a decade of experience in commercial solar advisory, SolarKal has witnessed firsthand the resilience and profitability of solar energy as a business investment. Here are three reasons why solar continues to make financial and strategic sense, no matter what happens with U.S. policies or incentives:
Solar consistently delivers exceptional ROI, driven by long-term energy savings and predictable cash flow benefits. Even without federal incentives, solar installations provide decades of reduced energy costs, helping businesses protect themselves from utility rate volatility while providing above-market returns. In markets with high electricity rates, the payback period for solar investments is often under seven years without any federal incentives — well within the life cycle of a solar panel, which can generate energy for 25 years or more.
The commercial solar market has grown steadily, with costs dropping over 90% in the last decade due to advances in technology and increased competition in the sector. Regardless of policy changes, this momentum is unlikely to slow, with more businesses recognizing the operational and financial advantages of solar as part of a long-term strategy.
While there may be political discussions about scaling back climate action incentives, completely removing federal solar programs is no simple task. The Investment Tax Credit (ITC), a cornerstone of solar incentives and a primary benefit to many of our clients, has been in place for over 20 years, earning bipartisan support for its role in fostering clean energy innovation and job creation. Additionally, state policies and incentives to foster solar adoption remain strong (see blog: The 50 States of SolarKal), with Massachusetts, for example, just enacting and funding sweeping climate action legislation.
The best time to go solar was yesterday — the next best time is today. Don’t wait and miss out!
Waiting introduces unnecessary risks and potential costs while providing no clear advantages. By acting now, clients can lock in favorable incentives, avoid rising costs, and start reaping the financial benefits of solar immediately.
For many of our clients this means executing their solar development contract before the end of the year and spending at least 5% of total project cost to achieve “Safe Harbor" of the ITC in its current form. Paraphrased from the Solar Industries Association Tax Manual: “The ITC safe harbor provision allows customers to preserve the Investment Tax Credit (ITC) by beginning construction on a solar project before a certain date.” According to the IRS, companies may "begin construction" of a project by paying or incurring at least 5 percent of the total cost of the project’s “energy property.”
Solar was a viable, lucrative investment long before the Inflation Reduction Act, and it will continue to be — even in the unlikely scenario that the act is repealed. With incentives currently creating a ripe environment for new projects, the best course of action is to lock in savings and energy independence while conditions are favorable. SolarKal’s expert team can help you navigate today and tomorrow’s regulatory and incentive landscape to maximize your project's success.
Converting solar potential to solar revenue will continue to be our mission, and our commercial real estate clients will continue to see impressive returns on their solar investments.
Rest assured that SolarKal will be on top of any shifts to the policy landscape and will keep our clients informed as the political transition takes place. Look for informative updates, webinars, and expert advice notices.
