Incentives to go Solar
Apart from reducing your operational costs, there are several programs that encourage farmers to go solar by offering grants, incentives and tax deductions
REAP Program Grant
The USDA’s Rural Business Service offers REAP (Rural Energy for America Program). This program offers both grants and loan guarantees to farms and rural businesses to invest in renewable energy systems. Qualifying applicants will receive a grant of up to 50% of the total project cost.
Who is Eligible?
Farmers - Individual or entity directly engaged in agricultural production where 50% or greater of its gross income is derived from agricultural production. Incorporating the operation as an LLC or otherwise can ensure that your farm exceeds this threshold.
Rural Small Businesses - A business is defined as "small" using the SBA Size Standards Table. It is defined as "rural" with USDA's Rural Eligibility Map. Click below to see eligibility.
ITC
The Federal Investment Tax Credit (ITC) allows you to deduct up to 30% of your project’s cost from your federal taxes. If you don’t have enough tax liability to claim the entire credit in a single year, it has a 20 year carry-forward.
2023 was the last year to receive the full 30% ITC. Starting in 2024, the tax credit percentage starts to reduce annually. With a diminishing window of tax credits, we encourage a sense of urgency to capitalize on higher incentives while they last.
Other Incentives
Many states, local municipalities, and even utility companies offer their own incentives for renewable energy systems. These often come in the form of tax credits, rebates, or discounts.
Some utility companies offer net metering which means you could receive a bill credit or actual cash payment in exchange for your excess power generation.
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