An important part of solar build-out across our country is the support from federal, state, and local governments. In order to achieve our national goal of energy independence, the U.S. government passed tax laws and beneficial business guidelines that have helped make solar electricity economically viable as an alternative energy source. The Federal Government currently has the Federal Investment Tax Credit and MACRS Accelerated Depreciation available for renewable energy installations. A Power Purchase Agreement allows for profit and non-profit organizations to benefit from these incentives in the form of electricity savings and predictability.
In addition to federal incentives, many states passed laws that mandate a certain percentage of their state’s energy must come from renewable sources. These laws, called Renewable Portfolio Standards (RPS), will continue to drive solar construction in a number of ways. RPS mandates have aggressive time lines associated with compliance, most of which require the build-out a solar energy offering of between 5%-30% of overall energy production by 2016 to 2022 (depending on state). State governments have built in penalties if the utilities do not achieve these balanced portfolios, which requires them to support the move towards solar and other renewable sources. Each state provides economic incentives to help this migration towards clean energy, and these incentives play a valuable role in providing solar electricity as a viable energy source and investment.