About this update (6/12/20220)
This updates the solar checklist post: i.e. what to consider if deciding to make a PV solar investment. This update adds information about the financial engineering consideration for the investment.
The “Commercial Solar Design-Build+Development Group” at Wilkinson Building Advisors can help apply the following checklist to discover opportunities….the earlier the better. Review of commercial real estate ventures in the planning stage maximizes financial opportunity. Here are some thoughts about how to get started…..
The good news for the right commercial ownership is that the incentives in Minnesota (Xcel service areas) are compelling. In general they are:
- Serving utility, direct connect incentives (net metering and the annual Solar Rewards rebate) for the 40kw (or less) arrays
- Federal income tax incentives for the corporation that can utilize Investment tax credits and accelerated depreciation
- State income tax incentive in the form of accelerated depreciation and elimination of sales tax
- The MN PACE program which provides favorable interest rates and term on qualifying energy effective investments
In addition, skillful analysis of a (new or proposed) site and building may yield many cost effective alternative designs from which to choose, for example: ground mounted arrays, building mounted arrays, or roof mounted arrays. This is where working with a solid architectural and engineering team can make a good deal even better.
Planning with the solar energy checklist
Application of solar energy generation and use into a building project involves a sequence of planning, design, construction, operational actions as well as financial engineering.
In the case of an existing site and building what constitutes “solar ready”?
- Is there physical space on the building or site in sufficient quantity?
- Open space on the site
- Roof space on the building
- Exterior wall space on the building
- If the building roof is to support solar arrays, is the roof configuration suitable to support the solar equipment?
- Is it strong enough?
- Is it not in shadow most of the day?
- Does the local serving utility offer financial incentives? (Each utility service area varies).
- Is the federal and state tax status of the building ownership such that tax incentives can be taken advantage of? )(Are you filing as a C-form or S-form corporate entity?)
- Does it make sense for the owning entity to allocate its capital and credit-worthiness to the solar enterprise; i.e. is the pay-back period short enough?
- What incentives are offered by the state, county, and local levels of government?
In the case of a site and building project, all of the above considerations apply. However, there are additional advantages:
- The physical plan can be laid-out maximize solar collection potential without sacrificing other requirements
- The configuration of array’s supporting elements can be designed for efficiency, and cost effectiveness
- The solar configuration can be part of the aesthetic and architecture
With the above ideas in mind, it is also important to remember that the tax status of individuals and corporations are very different. This has a fundamental bearing on the “go, no-go” decision. Can various tax incentives be applied?
Lastly, working with an experienced entity that can deliver all aspects of a well-engineered financial and physical solution is a key to success. Plan thoughtfully and act purposely.
Contact George Wilkinson ((612) 889-3792) or Dean Larson ((612) 685-9207) at Collins Electric for more information.