As a commercial farmer, you understand the importance of watching your budget. Keeping costs to a minimum goes hand in hand with running a successful business.
The development of renewable energy sources presents an exciting opportunity for farmers to reduce their overall operating costs and make their businesses more sustainable, while still getting the power they need.
In this blog post, we’ll explore how farmers can take advantage of renewable energy and turn it into cost savings. After reading this article, you should have a better understanding of how you can save money by utilizing renewable energy sources on your farm.
The most obvious way to save money with renewable energy is by reducing your electricity costs. By installing solar panels on your farm, you can generate power at a fraction of the cost of traditional electricity. Not only will this reduce your monthly electric bill, but it can also provide an additional income stream from net energy metering.
Net energy metering allows commercial solar customers to receive credits on their electricity bills for the extra energy they produce.
The California Public Utilities Commission just passed Net Energy Metering 3.0 (NEM 3.0) which is an updated set of rules with significant impacts for farmers.
The most newsworthy of these changes is the reduction in the overall rate that utilities will pay under NEM 3.0 for power received from solar systems.
For commercial solar suppliers to the grid, a significant breakthrough is that solar power can now be stored and sold at another time. This way, they are able to keep energy during hours of intense sunlight and then sell it back to the grid when prices are highest.
Not only will this enable them to get maximum credits in return but also make investing in battery-included solar systems just as cost-effective as those without batteries.
A tax credit is an exceptional way to reduce the amount of income taxes you owe. As a great example, if you claim a $1,000 federal tax credit then your federal income taxes due will be decreased by $1,000 - quite literally taking money from the IRS and putting it in your pocket.
The solar investment tax credit (ITC) is a tax credit that can be claimed on federal corporate income taxes for 30% of the cost of a solar photovoltaic (PV) system that is placed in service during the tax year.
Typically, a solar PV system that is eligible for the ITC can also use an accelerated depreciation corporate deduction.
Eligibile Expenses:
Note: We are not tax professionals, and we do encourage you to discuss these tax credits with your CPA as they are subject to change.
The CPUC’s Self-Generation Incentive Program (SGIP) offers rebates for installing energy storage technology at both residential and non-residential facilities.
The CPUC has authorized funding of more than $1 billion through 2024 for SGIP.
This funding includes prioritization of communities living in high fire-threat areas, communities that have experienced two or more utility Public Safety Power Shut-off (PSPS) events, as well as low income and medically vulnerable customers.
The best way to get started in accessing SGIP is to reach out to an installer who can help navigate the application process.
By utilizing renewable energy sources on your farm, you can transform the way you generate and use electricity. With net energy metering programs like NEM 3.0, as well as solar tax credits from both the federal government and state governments, there are plenty of ways to save money with renewable energy.
Transform Energy is available to help you explore your options. Contact us today for a free consultation with an expert energy advisor.