As the world continues to shift towards a more sustainable future, auto dealerships are stocking more electric vehicles (EVs). However, as more EVs roll onto showroom floors, most dealerships face the challenge of escalating operating expenses for a business that already consumes more energy than most. Many New Jersey auto dealerships have successfully turned to solar energy in order to offset the costs of monthly energy usage. A solar energy system on an auto dealership rooftop or solar carports in their parking lots, auto dealerships can both reduce their carbon footprint while saving money on their electricity bills.
Some auto dealerships have hesitation about making the switch to solar energy because of the initial upfront investment. However, new solar incentives and tax credits have been put into play over the past year and they significantly reduce the costs for auto dealerships to install solar. By taking advantage of these solar energy incentives, auto dealerships typically see a Return on Investment (ROI) in 2 – 3 years or less. The monthly energy savings begin the moment the solar energy system is turned on.
What are the incentives that make solar energy a win-win energy solution?
FEDERAL INCENTIVES
The 30% Solar Energy Tax Credit is one of the largest financial benefits which mitigates the upfront cost of installing solar energy for auto dealerships. This dollar for dollar tax credit allows dealerships to take a one time 30% tax deduction of the cost of installing a solar energy system. This includes engineering, system parts, and labor. With the passage of the Inflation Reduction Act, this tax credit was raised from 26% to 30%.
Another Federal incentive is the MACRS (Modified Accelerated Cost Recovery System) is a depreciation program, which enables businesses to depreciate the cost of their solar energy system over a period of five years. The MARCRS program was originally established in 1986, as a method of depreciation in which a business’ investments in certain tangible property are recovered, for tax purposes, over a specified time period through annual deductions.
Lesser known is that many New Jersey Auto Dealerships could qualify for a REAP (Rural Energy for America Program) Grant if they operate in a town with a population of less than 50,000 residents. A REAP grant provides additional funding for qualified businesses to install solar energy systems. Click Here to explore whether or not your location qualifies.
STATE INCENTIVES
New Jersey ranks among the Top 10 States for solar energy incentives. New Jersey Governor Phil Murphy’s ambitious Master Energy Plan set the Garden State on a path to being powered 100% by clean energy in 2050. Part of this plan provides lucrative state incentives for businesses to go solar in order to reach this goal.
The New Jersey SREC (State Renewable Energy Credit) recently transitioned from fluctuating, market driven incentives to it’s successor solar incentive (SuSI) program which gives a credit for a fixed dollar amount for every 1,000 kwH of solar energy a solar energy system produces. The commercial (rooftop, ground mount, or carport) SuSI amount was recently raised to $110 per credit for solar energy systems sized under 1 MW.
Another perk of being a New Jersey commercial solar adopter is that the components of your solar energy system are not subject to state tax. This allows auto dealerships to make an exempt capital improvement that decreases monthly overhead and increases property value.
After your auto dealership’s solar energy system is up and running, New Jersey allows for Net Energy Metering (NEM). This is a billing arrangement where excess electricity produced from solar energy panels is tracked by your dealership’s electricity provider and the value is credited to your monthly electric bill. If your solar system produces more electricity than your dealership consumes, your excess electricity is effectively sold back to the grid.
Any or all of these incentives combined make the long-term investment in solar energy both affordable and a natural solution for auto dealerships that continually fight against the rising cost of electricity. In today’s economy, solar energy is a safe investment with guaranteed returns. This investment is not only fiscally responsible, but it aligns with the increased demand for corporate sustainability goals and yield the additional benefit of a responsible brand image for your dealership.
Ready to take the next step? Geoscape Solar specializes in leveraging solar incentives to allow for the fastest payback period for your auto dealership. Geoscape Solar has extensive experience in engineering, financing, and installing solar energy systems at auto dealerships throughout New Jersey.
