Mississippi: Commercial Solar Financing + Government Incentives 0

Exploring commercial solar financing and government incentives in Mississippi can be a transformative step for businesses that want to invest in renewable energy. From attractive tax credits to specialized financing solutions, the opportunities available can substantially lower costs and enhance the feasibility of solar projects.

This guide will cover the main commercial solar financing options and government incentives available in Mississippi, equipping business owners with the essential knowledge to make informed decisions and maximize the benefits of solar energy. Whether you run a small business or oversee large commercial properties, understanding these programs can help you achieve sustainability, secure long-term energy savings, and contribute to a greener future.

Main C&I Solar Financing Options in Mississippi

Solar Lease 

A solar lease in Mississippi functions like renting, where a business pays a set monthly fee to use a solar energy system installed by a third-party provider. This fixed payment remains consistent, regardless of the amount of energy generated, and the third-party provider takes care of the system’s maintenance.

Ideal C&I Projects for a Solar Lease 

Solar leases are excellent for medium-sized commercial properties, such as retail outlets, small manufacturing facilities, or multi-tenant buildings. These businesses can take advantage of solar energy without the need for upfront system purchases or dealing with maintenance responsibilities.

Solar Loan 

A solar loan allows a business to borrow funds to purchase and install a solar energy system. The business owns the system and can benefit from tax credits and incentives, repaying the loan over time with interest.

Ideal C&I Projects for a Solar Loan 

Solar loans are best suited for businesses that prefer ownership to take full advantage of tax benefits like the Investment Tax Credit (ITC) or Production Tax Credit (PTC). They are ideal for commercial entities with strong credit histories, such as corporate offices, hotels, or hospitals, particularly those planning to remain on the property long-term.

Energy Service Agreements (ESA) 

An Energy Service Agreement (ESA) involves a service provider installing and maintaining an energy system on the property at no upfront cost to the property owner. The property owner pays for the energy consumed at a rate generally lower than the local utility rate. ESAs often include performance guarantees, tying payments to energy savings compared to a predetermined baseline.

Ideal C&I Projects for an ESA 

ESAs are well-suited for energy-intensive businesses such as data centers, large supermarkets, or industrial facilities aiming to reduce energy costs without initial investment or maintenance worries. These agreements help stabilize energy expenses, allowing businesses to focus on their core operations.

Commercial Solar Financing Companies in Mississippi

Key Equipment Finance®

Offers flexible financing solutions for commercial solar energy projects to help businesses manage costs and improve cash flow. 

Green Bridge Energy (US-Wide)

Green Bridge Energy offers tailored financing solutions for commercial solar projects, providing a range of financial products designed to suit the varied needs of businesses.

Sustainable Capital Finance (US-Wide)

Specializing in takeout financing for large-scale commercial and non-profit solar projects over 100 kW, Sustainable Capital Finance supports solar installations for municipalities, tribal organizations, non-profits, religious groups, and educational institutions across the nation.

Greentech Renewables (US-Wide)

Greentech Renewables delivers reliable financial solutions for commercial solar projects throughout the United States. Their services include managing the procurement of necessary products and materials, overseeing loan origination and maintenance, and ensuring smooth coordination with financing partners.

SunRenu (US-Wide)

SunRenu offers businesses flexible financing options to support the installation of their solar energy systems, providing solutions for both partial and full funding needs. Their financing options help clients adopt solar energy with little to no upfront costs.

Commercial Solar Loan Rates in Mississippi

Commercial solar loan rates in Mississippi can vary based on several factors. Understanding these elements can help businesses secure the most favorable terms for their solar projects. 

Here are some key factors that influence commercial solar loan rates:

  1. Creditworthiness: A business’s credit history and financial health play a significant role in determining loan rates. Higher credit scores typically lead to lower interest rates.
  2. Loan Term: The length of the loan can affect the interest rate. Generally, shorter loan terms come with lower rates, while longer terms might have higher rates but lower monthly payments.
  3. Loan Amount: The size of the loan also impacts the rate. Larger loans might offer more competitive rates due to the scale of the investment.
  4. Down Payment: The amount of upfront payment made towards the loan can influence the interest rate. Larger down payments can reduce the overall loan amount and potentially secure a lower rate.
  5. Market Conditions: Economic factors and market conditions, such as inflation rates and the federal funds rate, can influence the interest rates offered by lenders.
  6. Lender Policies: Different lenders have varying policies and criteria for determining loan rates. It’s beneficial to shop around and compare offers from multiple lenders.
  7. Project Details: The specifics of the solar project, including the expected energy savings, system size, and installation costs, can also impact the loan rate.

Commercial Solar Leases in Mississippi 

Commercial solar leases in Mississippi offer businesses a flexible and cost-effective way to harness solar energy without the need for substantial upfront investments. By entering into a solar lease agreement, companies can benefit from clean energy and potentially lower electricity bills while avoiding the complexities and costs associated with purchasing and maintaining a solar system outright.

How Commercial Solar Leases Work

In a solar lease arrangement, a third-party provider installs and owns the solar energy system on the business’s property. The business then pays a fixed monthly fee to the provider for using the system. This fee is typically less than the current utility rates, offering immediate savings on energy costs. The provider remains responsible for the maintenance and performance of the system, ensuring that it operates efficiently throughout the lease term.

Advantages of Commercial Solar Leases

  1. No Upfront Costs: One of the primary benefits of a solar lease is the elimination of significant initial expenses. Businesses can start saving on energy costs without making a large capital investment.
  2. Predictable Energy Costs: With a fixed monthly lease payment, businesses can better manage their budgets and avoid the fluctuations of traditional utility rates.
  3. Maintenance-Free: The third-party provider handles all maintenance and repairs, ensuring that the solar system operates optimally without additional costs or efforts from the business.
  4. Immediate Savings: Since the lease payments are often lower than traditional energy bills, businesses can start seeing savings as soon as the system is operational.
  5. Environmental Impact: Leasing a solar system allows businesses to reduce their carbon footprint and contribute to environmental sustainability without the burden of ownership.

Does Mississippi Have Solar Incentives? 

What Is the Net Metering Rule in Mississippi?

Mississippi provides net metering, which allows businesses to earn credits on their electricity bills for excess energy generated by their solar systems. These credits can offset future energy costs, making solar installations more financially viable​.

Here are the key points specific to businesses:

  1. Eligibility: Commercial solar power users are eligible to participate in the net metering program. This includes all commercial property types that have installed solar energy systems.
  2. Two-Way Meter Installation: Once enrolled in the program, Entergy Mississippi installs a two-way meter at the business premises. This meter tracks the amount of electricity the solar panels produce and the amount of surplus energy sent back to the grid.
  3. Energy Credits: Businesses earn credits for the excess solar energy generated. These credits are applied to their future utility bills, effectively reducing their electricity costs. The credits are calculated based on the kilowatt-hours (kWh) of surplus energy exported to the grid.
  4. Monthly Billing: The energy credits appear on the monthly electric bill, offsetting the cost of the electricity that the business draws from the grid when its solar system is not producing enough energy, such as at night or during cloudy days.
  5. Financial Benefits: By participating in net metering, businesses can lower their operational costs and improve their return on investment in solar energy systems. This program helps enhance energy independence and supports sustainable business practices.

How to Apply to Net Metering

1. Determine System Size 

Identify the size of your Distributed Generation Facility (DGF).

  • If the system is 20 kW or less, use the Level 1 application.
  • For systems between 20 kW and 500 kW, use the Level 2 application.
  • For systems larger than 500 kW, use the Level 3 application.

2. Complete the Application

Fill out the appropriate Interconnection Application and Agreement form based on your system size.

3. Submit the Application

Send a scanned copy of the completed form to emisolar@entergy.com or mail it to:

Entergy Mississippi

Attention: Customer Service Support

P.O. Box 1640

Jackson, MS 39215-1640

4. Approval and Account Update

Once your application is received and approved, Entergy Mississippi will make the necessary changes to your account to enable participation in the net metering program.

For more details, you can visit the Entergy Mississippi Net Metering Page.

Mississippi Power’s Large Commercial & Industrial Program

The Large Commercial & Industrial Program offers a rebate program for large commercial and industrial businesses to encourage energy-saving upgrades. Eligible participants can receive up to $50,000 in rebates per year for various energy-efficient installations, including lighting, heating and cooling, insulation, and refrigeration systems. 

Application Process

  1. Identifying eligible equipment you want to install at your facility
  2. Submit your customer participation agreement and supporting documents: Alternate Payee Form and IRS W-9 form
  3. Once you’re approved, you will get a confirmation email and you can do you installation in-house or a contractor of your choice
  4. When the approved project is finished, submit your final invoice within 120 days and Mississippi Power will send your rebate in the mail within 6 weeks of receiving the invoice.

USDA Rural Energy for America Program (REAP) Grants

Mississippi businesses, particularly those in rural areas, may qualify for grants and loans through the USDA REAP. This program provides funding to agricultural producers and rural small businesses for renewable energy systems and energy efficiency improvements.

Mississippi Development Authority (MDA) Energy Efficiency and Renewable Energy Programs

​​The Mississippi Energy Efficiency Revolving Loan Fund, administered by the Mississippi Development Authority (MDA), offers several benefits for businesses looking to improve energy efficiency:

  1. Financial Support: Provides loans up to $500,000 for energy efficiency projects at an interest rate 2% below the Wall Street Journal’s Prime Rate, with terms up to 10 years.
  2. Eligibility: Available to corporations, partnerships, sole proprietors, hospitals, higher education institutions, community colleges, public school districts, and local government entities.
  3. Eligible Projects: Includes retrofits, energy-efficient processes, and various energy conservation measures like insulation, renewable energy systems, and HVAC upgrades.
  4. Comprehensive Coverage: Loans cover equipment, labor, and installation costs.
  5. Energy Savings: Projects must demonstrate significant energy savings through an Energy Analysis, ensuring long-term financial benefits and sustainability.

Free Commercial Solar Financing Mississippi

For businesses in Mississippi, the shift to solar energy can seem financially daunting, but “free commercial solar financing” offers an attractive solution. These financing options allow companies to adopt solar power without significant upfront costs, making the transition to renewable energy more feasible and appealing.

What Is Free Commercial Solar Financing?

Free commercial solar financing generally refers to financing methods that minimize or eliminate initial out-of-pocket expenses for businesses. These options enable companies to install and benefit from solar energy systems while spreading the costs over time. 

Here are some key options available in Mississippi:

1. Solar Leases

A solar lease involves a third-party provider installing and maintaining a solar system on your property. The business pays a fixed monthly fee to use the system, often lower than traditional utility costs. This setup means no upfront payment, making solar energy accessible and financially manageable from the start.

2. Energy Service Agreements (ESAs)

With an ESA, a service provider installs and maintains the solar system on the business property. The business pays for the energy consumed at a rate typically lower than the local utility rate, with no initial cost. This approach allows companies to benefit from solar energy and stable energy costs without upfront financial commitments.

3. Grants and Incentives

Various federal, state, and local grants and incentives can help offset the cost of solar installations. Programs like the Federal Investment Tax Credit (ITC) or Production Tax Credit can significantly reduce the overall project cost. Mississippi may also offer specific grants or rebates to encourage renewable energy adoption, easing the financial burden on businesses.

Benefits of Free Commercial Solar Financing

  • No Upfront Costs: Businesses can transition to solar energy without significant initial investments, making solar more accessible.
  • Predictable Energy Costs: Financing options often come with fixed payments, helping businesses manage their budgets and avoid fluctuating energy prices.
  • Maintenance-Free: Many financing arrangements include maintenance, ensuring the solar system operates efficiently without additional costs to the business.
  • Immediate Savings: By adopting solar energy, businesses can start saving on energy costs right away, even without upfront payments.
  • Environmental Impact: Switching to solar power helps reduce carbon footprints and supports sustainability efforts.

Federal Solar Tax Credits for Commercial Projects in Mississippi

Businesses in Mississippi can leverage two federal solar tax credits to alleviate the financial burden of solar energy installations:

  1. Investment Tax Credit (ITC)
  2. Production Tax Credit (PTC)

While project owners typically cannot claim both credits for the same property, it may be possible to apply different credits for co-located systems, such as a combination of solar and storage, with further guidance from the IRS.

Investment Tax Credit (ITC)

The Investment Tax Credit (ITC) is a federal tax incentive that allows businesses, including commercial property owners, to deduct a percentage of the cost of installing a solar energy system from their federal taxes. This incentive is designed to reduce the cost of solar energy installations and promote the adoption of renewable energy.

Key Features

  • Deduction Percentage: The ITC provides a 30% tax credit for solar systems installed from 2022 through 2032.
  • Eligibility: Applicable to both residential and commercial solar systems, including those on commercial properties and industrial buildings.
  • Cost Coverage: The credit covers various installation costs, including equipment, labor, and system design.
  • Carryover Provisions: If the tax credit exceeds the business’s tax liability for the year, the excess can be carried forward to future years.

Example of Savings from the ITC

Suppose a business in Mississippi plans to install a solar energy system on its commercial property at a total cost of $500,000. Here’s how the business can benefit from the ITC:

  • Total solar installation cost: $500,000
  • ITC Savings: $150,000 ($500,000 x 0.30 = $150,000)
  • Net Cost of the solar installation after ITC: $350,000 ($500,000 – $150,000 = $350,000)

Additional Savings from the Solar System

  • Annual Energy Savings: $96,000 (assuming the system generates 800,000 kWh per year and the current electricity rate is $0.12 per kWh)
  • 10-Year Energy Savings: $960,000 ($96,000 x 10 = $960,000)

Production Tax Credit (PTC)

The Production Tax Credit (PTC) offers a per kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources, including solar energy systems, for the first ten years of the system’s operation. The credit amount is adjusted annually for inflation.

Key Features

  • Per kWh Credit: The PTC currently provides a credit of 2.75 cents per kWh of electricity generated by solar systems that meet specific requirements.
  • Duration: Applies to the first ten years of a system’s operational life.
  • Inflation Adjustment: The credit amount is adjusted annually to account for inflation.
  • Eligibility: Systems must meet certain labor and wage requirements set by the Treasury Department to qualify for the full credit amount.

Example of Savings from the PTC

Consider a business in Mississippi planning to install a solar energy system on its commercial property at a total cost of $1,000,000. The system is expected to generate 1,500,000 kWh of electricity annually. Here’s how the business can benefit from the PTC:

  • Total Cost of Solar Installation: $1,000,000
  • Annual Energy Generation: 1,500,000 kWh
  • PTC Rate: 2.75 cents per kWh
  • Annual PTC Amount: $41,250 (1,500,000 x $0.0275 = $41,250)
  • Total PTC Savings Over 10 Years: $412,500 ($41,250 x 10 = $412,500)

This means the business can reduce its federal tax liability by $41,250 each year for the first ten years of the system’s operation.

Additional Savings from the Solar System

  • Annual Energy Savings: $180,000 (1,500,000 kWh x $0.12 per kWh)
  • 10-Year Energy Savings: $1,800,000 ($180,000 x 10)

By use these federal tax credits, Mississippi businesses can significantly lower the cost of their solar energy installations and benefit from substantial long-term savings.

Leveraging MACRS to Lower Taxes for Solar System Installations

The Modified Accelerated Cost Recovery System (MACRS) is a tax depreciation system in the United States that allows businesses to recover the costs of certain capital investments over a specified timeframe through annual deductions. By installing a solar energy system, businesses can utilize MACRS to significantly reduce their tax liabilities.

How MACRS Works

Depreciation Timeline Solar energy systems qualify for a five-year depreciation schedule under MACRS. This enables businesses to depreciate the cost of their solar installation over five years, offering substantial tax benefits in the early years following the installation.

Bonus Depreciation In addition to the standard MACRS depreciation, the Tax Cuts and Jobs Act of 2017 introduced a 100% bonus depreciation for eligible properties placed in service between September 27, 2017, and December 31, 2022. This provision allows businesses to deduct the entire cost of the solar system in the first year.

Eligible Expenditures Expenses that qualify for depreciation under MACRS include the total installed cost of the solar energy system. This covers all associated costs, such as equipment, labor, and installation.

By leveraging MACRS, businesses can significantly lower their tax obligations, making the investment in solar energy systems more financially attractive.

Are Solar PPAs Allowed in Mississippi? 

As of now, Mississippi’s regulatory framework does not explicitly support PPAs for solar energy. The state’s regulations and utility policies pose challenges for third-party ownership models like PPAs. 

This means that while PPAs are a well-established financing option in many parts of the United States, they are not widely available or feasible in Mississippi due to the current regulatory environment.

Conclusion

Mississippi offers a range of commercial solar financing options and government incentives to make solar energy more accessible and affordable for businesses. Although Power Purchase Agreements (PPAs) are not widely supported, other innovative financing solutions such as solar leases, solar loans, and Property Assessed Clean Energy (PACE) financing are available. These options help reduce upfront costs and improve the financial feasibility of solar installations. Additionally, federal tax credits and other incentives can enhance the return on investment by providing long-term savings through reduced energy costs and favorable tax treatments.

By leveraging these financial tools and incentives, commercial property owners in Mississippi can significantly benefit from the transition to solar energy. These measures not only contribute to substantial cost savings and improved sustainability but also align with the state’s broader goals of promoting renewable energy and reducing carbon emissions.

Melissa brings over 20 years of communications and marketing experience, consistently delivering impactful contributions that strengthen organizational relationships, optimize operational efficiency, and increase sales. With a deep-rooted interest in environmental solutions, she loves applying her skills to increase the adoption of solar technology globally.
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