Wisconsin: Commercial Solar Financing + Government Incentives 0

Looking into commercial solar financing and government incentives in Wisconsin can be a game-changer for businesses wanting to go green. With helpful tax credits and special financing options, these opportunities can make solar projects more affordable and practical.

This guide will go over the main commercial solar financing options and government incentives available in Wisconsin. It will help business owners make smart choices and get the most out of solar energy. Whether you own a small business or manage large properties, knowing about these programs can help you save money on energy, be more sustainable, and support a greener future.

Commercial Solar Financing Companies in Wisconsin

Solar Lease

A solar lease works much like renting. A business pays a set monthly fee to use a solar energy system installed by a third-party company. The payment stays the same no matter how much energy is produced, and the third-party company takes care of the system maintenance.

Types of C&I Projects Suited for Solar Leases
Solar leases are perfect for medium-sized commercial properties like retail stores, small manufacturing units, or multi-tenant buildings. These businesses can benefit from solar energy without buying the system or handling maintenance.

Solar Loan

A solar loan allows a business to borrow money to buy and install a solar energy system. The company owns the system and can take advantage of tax credits and incentives, paying back the loan over time with interest.

Types of C&I Suited for Solar Loans
Solar loans are ideal for businesses that want to own the system and benefit from tax incentives like the Investment Tax Credit (ITC) or Production Tax Credit (PTC). They work well for commercial properties with strong credit, such as corporate offices, hotels, or hospitals, that plan to stay long-term.

Energy Service Agreements (ESA)

An Energy Service Agreement (ESA) involves a provider installing and maintaining a solar system at no upfront cost to the property owner. The owner pays for the energy used at a rate usually lower than the local utility rate. ESAs often include performance guarantees, with payments tied to energy savings compared to a set baseline.

Types of C&I Suited for ESAs
ESAs are great for businesses with high energy use, like data centers, large supermarkets, or industrial facilities, that want to cut energy costs without upfront expenses or maintenance. These agreements help stabilize energy costs, allowing businesses to focus on their main operations.

Commercial Property Assessed Clean Energy (C-PACE)

C-PACE financing lets commercial property owners fund energy efficiency and clean energy improvements through a voluntary property tax assessment. The funding is provided by state or local governments and is repaid over a long period, typically matching the system’s lifespan.

Ideal C&I Projects for C-PACE
C-PACE financing is excellent for commercial properties undergoing major renovations or upgrades, including sustainable improvements. This option is suitable for shopping centers, older office buildings, or hotels looking to enhance energy efficiency and property values with sustainable upgrades.

Commercial Solar Financing Companies in Wisconsin

SunPeak

SunPeak provides extensive support for commercial solar projects, including design, installation, and financing solutions. They help businesses reduce energy costs and enhance sustainability through reliable solar installations.

Commercial-Solar.org 

Commercial-Solar.org is dedicated to promoting the benefits and adoption of commercial solar energy solutions. Commercial-Solar.org helps finance commercial solar projects by offering various options, including solar leases, which allow businesses to install solar systems with little to no upfront costs. 

Green Bridge Energy (US-Wide)

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

Sustainable Capital Finance (US-Wide)

Specializing in financing for solar projects over 100 kW, Sustainable Capital Finance supports commercial and non-profit entities nationwide. Their services help municipalities, tribal entities, non-profits, religious groups, and educational institutions to go solar.

Greentech Renewables (US-Wide)

Greentech Renewables manages comprehensive financial solutions for commercial solar installations across the country. They handle product procurement, loan origination, and ongoing communication with financing partners to ensure project success.

SunRenu (US-Wide)

SunRenu offers financing options for businesses looking to install solar energy systems, covering both partial and full funding needs. Their solutions help clients adopt solar power with little to no upfront cost.

Commercial Solar Loan Rates

When considering commercial solar loans in Wisconsin, it’s important to understand that loan rates can vary based on several factors. While specific rate ranges can change frequently due to market conditions, here are some key elements that typically influence the loan rates for commercial solar projects:

  1. Creditworthiness: The credit score and financial health of the business play a significant role in determining the interest rate. Higher credit scores generally secure lower interest rates.
  2. Loan Term: The length of the loan term can affect the rate. Shorter-term loans often have lower interest rates but higher monthly payments, whereas longer-term loans may have higher rates but lower monthly payments.
  3. Loan Amount: The total amount borrowed can also impact the interest rate. Larger loans may offer more favorable rates, depending on the lender’s policies and the borrower’s credit profile.
  4. Type of Financing: Different financing products, such as traditional loans, lines of credit, or equipment financing, come with varying interest rates. Each type of loan has its own risk profile, which lenders consider when setting rates.
  5. Market Conditions: Economic factors, such as inflation rates and the overall health of the financial markets, can influence interest rates. Lenders adjust their rates based on these conditions to manage risk and profitability.
  6. Collateral: Secured loans, which use the solar equipment or other assets as collateral, often have lower interest rates compared to unsecured loans because they pose less risk to the lender.
  7. Lender Policies: Different lenders have unique criteria and risk assessments that affect the interest rates they offer. Shopping around and comparing offers from multiple lenders can help secure the best rate.

By understanding these factors, businesses can better prepare for financing their solar projects and potentially negotiate more favorable terms. Always consult with financial advisors and lenders to get the most accurate and up-to-date information on loan rates.

Does Wisconsin Have Solar Incentives?

Focus on Energy  

Focus on Energy is Wisconsin’s statewide energy efficiency and renewable resource program for businesses. It provides financial incentives, technical support, and resources to help businesses implement renewable energy projects, including solar. 

The program aims to reduce energy costs, improve sustainability, and enhance the state’s energy independence. By participating, businesses can access rebates and expert guidance to optimize their renewable energy installations.

You can see all of the latest Renewables for Businesses incentives here. 

Solar Sales Tax Exemption in Wisconsin 

The sales tax exemption for solar energy systems in Wisconsin is applied at the time of purchase. The solar sales tax exemption in Wisconsin is automatically applied to all qualifying solar equipment purchases. Businesses do not need to take any additional steps to claim this benefit; it is incorporated directly into the transaction at the point of sale.

This automatic application of the exemption makes it a straightforward and highly beneficial incentive for Wisconsinites. Unlike in many other states, where additional paperwork or applications might be required, Wisconsin’s approach simplifies the process, making it easier for individuals and businesses to invest in solar energy.

Qualifying Solar Equipment for Wisconsin Sales Tax Exemption

  • Photovoltaic Cells, Modules, and Arrays: Includes tracking equipment that optimizes orientation to the sun.
  • Solar Thermal Collectors: Must meet specific output ratings.
  • Inverters: Used to convert direct current to alternating current, including equipment used to convey direct current to the inverter.
  • Installation Hardware: Necessary for installing qualifying solar products.

Financial Impact

For an average solar project cost of $23,240, the 5% sales tax exemption (at the time of this article’s publication) translates to savings of approximately $1,162. These savings are included directly in the initial cost estimate for going solar, rather than being applied as a rebate. Larger systems result in even greater savings, enhancing the financial benefits of investing in solar energy.

Solar Property Tax Exemption in Wisconsin 

Installing solar panels on commercial properties in Wisconsin can increase the value of the property. However, thanks to the Wisconsin State property tax exemption, businesses will not experience an increase in property taxes due to this added value.

Process for Businesses to Apply for Property Tax Exemption for Solar Systems in Wisconsin

  1. Install Qualifying System: Ensure the solar energy system meets the criteria outlined by the state.
  2. Documentation: Maintain records of the installation and the qualifying equipment used.
  3. Apply Through Local Assessor: Submit an application to the local property assessor’s office, providing necessary documentation to demonstrate the system’s eligibility.
  4. Receive Exemption: If approved, the property tax exemption will be applied, excluding the added value from the solar system from property taxes.

Benefits

This exemption provides significant financial relief and encourages businesses to invest in renewable energy. Not all states offer such an exemption, making it a valuable incentive for businesses in Wisconsin.  

Net Metering Wisconsin

Net Metering allows businesses to offset their energy usage by generating their own electricity and receiving credits for any excess energy sent back to the grid.

Benefits

  • Energy Independence: Reduces reliance on the utility grid and stabilizes energy costs.
  • Environmental Impact: Promotes the use of renewable energy, contributing to a reduction in carbon footprint.
  • Financial Incentives: Net metering can improve the return on investment for renewable energy systems.

Steps for Businesses to Apply for Net Metering in Wisconsin

  1. Evaluate Eligibility: Ensure your business’s renewable energy system qualifies for net metering.
  2. Install the System: Set up the renewable energy system according to local codes and regulations.
  3. Contact Utility: Inform your utility company about your intent to apply for net metering and request the necessary forms.
  4. Submit Application: Complete and submit the application forms along with required documentation to the utility.
  5. Inspection and Approval: Allow the utility to inspect the system for compliance.
  6. Start Net Metering: Once approved, begin receiving credits for excess energy generated.

Free Commercial Solar Financing Wisconsin

Businesses in Wisconsin have several “free” financing options for solar installations, allowing them to adopt renewable energy with minimal upfront costs:

  1. C-PACE (Commercial Property Assessed Clean Energy): This program provides long-term financing for energy-efficient upgrades, including solar panels. The loan is repaid through property tax assessments, eliminating the need for upfront capital.
  2. Solar Loans: These loans cover the entire cost of solar installations, with repayment terms designed to be offset by energy savings, effectively making the investment cost-neutral.
  3. Solar Leases: Businesses can lease solar systems with little to no upfront costs, paying a fixed monthly rate that is often lower than traditional energy bills.

These financing options enable businesses to harness solar energy without the financial burden of significant initial expenses.

Federal Solar Tax Credits for Commercial Projects in Wisconsin

Wisconsin businesses can benefit from two significant federal tax incentives to reduce the cost of solar installations:

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

Typically, project owners can’t claim both the ITC and PTC for the same property. However, they may be able to apply different credits to co-located systems, like solar and storage, based on IRS guidance. Other renewable energy and storage technologies are also eligible for the ITC, but this topic is beyond the scope of this discussion.

Investment Tax Credit (ITC)

The ITC allows businesses to deduct 30% of the cost of installing a solar energy system from federal taxes. This credit applies to various installation costs such as equipment, labor, and system design. If the credit exceeds the tax liability, it can be carried forward to future years.

Example:

  • Total installation cost: $500,000
  • ITC savings: $150,000 (30% of $500,000)
  • Net cost after ITC: $350,000

Production Tax Credit (PTC)

The PTC offers a per kilowatt-hour (kWh) tax credit for electricity generated by qualified solar systems for the first ten years of operation. The current rate is 2.75 cents per kWh, adjusted annually for inflation.

Example:

  • Total installation cost: $1,000,000
  • Annual energy generation: 1,500,000 kWh
  • Annual PTC amount: $41,250 (1,500,000 kWh x $0.0275)
  • Total PTC savings over 10 years: $412,500

These credits significantly reduce the financial burden of solar installations, promoting the adoption of renewable energy in Wisconsin.

Leveraging MACRS to Lower Taxes for Solar System Installations

The Modified Accelerated Cost Recovery System (MACRS) is a tax depreciation method in the U.S. that allows businesses to recover the costs of capital investments, like solar energy systems, over a specified period through annual deductions.

How MACRS Works

Depreciation Timeline 

Solar systems can be depreciated over five years, offering substantial tax benefits in the initial years after installation.

Bonus Depreciation 

The Tax Cuts and Jobs Act of 2017 introduced a 100% bonus depreciation, permitting businesses to deduct the full cost of the solar system in the first year for systems placed in service between September 27, 2017, and December 31, 2022.

Eligible Expenditures 

Qualifying expenses include the total installed cost of the solar system, covering equipment, labor, and installation.

C-PACE (Commercial Property Assessed Clean Energy) Wisconsin

C-PACE is a financing mechanism that helps commercial property owners fund energy efficiency and renewable energy projects, including solar installations. 

How C-PACE Works

Long-Term Financing 

C-PACE provides long-term financing (up to 20 years) for energy improvements, which is repaid through a voluntary assessment on the property tax bill. This assessment stays with the property, not the owner, in case of sale.

Eligibility 

Eligible projects include energy efficiency upgrades, renewable energy installations, and water conservation measures.

Benefits

  • No upfront costs
  • Immediate savings on energy bills
  • Potential increase in property value
  • Transferable upon sale of the property

Repayment 

Repayments are made through property taxes, making them secure and providing a low-risk option for lenders.

By using C-PACE, Wisconsin businesses can make significant energy improvements without the financial burden of upfront costs.

C-PACE Providers in Wisconsin

Slipstream offers C-PACE financing for energy efficiency and renewable energy projects, helping commercial property owners achieve sustainability goals.

Nuveen Capital provides C-PACE financing solutions that enable property owners to improve energy efficiency without upfront costs.

Petros PACE Finance specializes in providing C-PACE financing for commercial properties, focusing on long-term energy savings and sustainability.

CleanFund offers tailored C-PACE financing options to support energy-efficient and renewable energy projects for commercial buildings.

PACE Equity provides comprehensive C-PACE financing solutions, ensuring projects are financially viable and energy-efficient.

CounterpointeSRE delivers C-PACE financing for a range of property types, promoting energy efficiency and environmental sustainability.

Ygrene Energy Fund offers C-PACE financing that covers 100% of project costs, aiming to make energy upgrades more accessible for commercial property owners.

Best Commercial Solar Financing Wisconsin

When seeking the best commercial solar financing options in Wisconsin, several factors should be considered to determine the most suitable choice for your project:

Factors to Consider

  1. Project Size and Scope: Large-scale projects might benefit more from loans or equipment financing due to significant upfront costs, while smaller projects could opt for leases to minimize initial expenditure.
  2. Financial Health: Businesses with strong credit ratings may secure favorable loan terms, while those with limited credit history might find leasing more accessible.
  3. Long-Term Goals: If long-term ownership and maximizing tax benefits are priorities, solar loans or equipment financing might be the best fit.
  4. Available Incentives: Consider state and federal tax incentives, such as the Investment Tax Credit (ITC) and Modified Accelerated Cost Recovery System (MACRS), to reduce overall costs.
  5. Repayment Flexibility: Evaluate the repayment terms and flexibility of each financing option to ensure it aligns with your business’s cash flow and financial planning.

By carefully assessing these factors and financing options, businesses in Wisconsin can choose the most beneficial solution for their solar energy projects, ensuring long-term savings and sustainability.

Conclusion

Wisconsin offers a range of commercial solar financing options and government incentives to make solar energy more accessible and affordable for businesses. With tax credits, rebates, and financing solutions like C-PACE, businesses can reduce upfront costs and enhance the financial viability of solar projects. 

These options not only provide significant cost savings and long-term energy reductions but also support Wisconsin’s commitment to promoting renewable energy and reducing carbon emissions. By leveraging these financial tools and incentives, commercial property owners in Wisconsin can benefit greatly from transitioning to solar energy, achieving both economic and environmental gains.

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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