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Investing in Solar Energy Production

Whether a manufacturing facility, office space, parking garage or multifamily complex, companies or developers that hold properties with unused rooftops and land may have a unique option to gain financial benefits through the installation of solar panels.

Solar Energy
Under the Inflation Reduction Act of 2022, the Clean Energy Investment Tax Credit (CEITC) has been modified and extended to 2033, providing a 30 percent credit for qualifying investments in renewable energy projects — including solar. The tax credit percentage also can potentially increase based on factors such as project location, labor and material production.

With the CEITC providing a cost-effective way to continue growing the green energy space, business owners and real estate developers can establish a long-term investment with significant benefits for their business.

Generating New Cash Flow

When it comes to solar energy, leasing panels and equipment can be an ideal way to maximize your return on an investment.

With a lease, the lessor who owns the panels receives the tax credit, which in turn benefits the lessee through reduced borrowing costs. When 100 percent financing is available, the overall upfront costs to your business are reduced or eliminated, further preserving cash flow at the start of the project so that you can continue to invest in other strategic priorities.

Throughout the panels’ anticipated 25- to 30-year life span, you can realize sustained financial benefits through the sale of your solar array’s energy to utility companies and/or reduced energy costs for your business or tenants.

Engage your tax advisor and a financing partner early to make certain you are exploring all the options available to you, including the opportunities to earn additional tax credits. For more information on the Inflation Reduction Act and the Investment Tax Credit for renewable energy projects, visit

Keep In Mind

With the world economy still impacted by the effects of the pandemic and ongoing geopolitical events, there are variables to consider when it comes to investing in a solar energy project, including extended lead times for manufacturing and, in turn, installation. Also, demand for panels may increase because of the CEITC extension, adding to potential challenges with availability.

If you decide to pursue this type of project, you may be presented with a growing number of companies who are eager to serve as partners with financing, production and installation. Be mindful of the critical element of trust when evaluating your options, as this is a significant investment and restarting the process will add cost and time.

Finally, there are recurring annual costs for these projects, such as maintenance and insurance, that will be part of the overall financial strategy you and your financing partner develop.

Forward-Thinking Companies

Investing in renewable energy represents your company’s commitment as a responsible corporate citizen — an area of increasing importance as it relates to your company’s performance, reputation and overall impact.

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