System Costs & Incentives

How much does a typical commercial solar PV system cost?

Various factors determine the final price of a PV system, including its size, component options and configuration, labor costs, local permitting costs and available incentives and tax credits. 

The cost of a solar electric system is measured in dollars per watt. The average cost for a multifamily system is currently $3-6 per watt. That means a 20-kW multifamily system will cost $60,000-$120,000, prior to tax credits or incentives (if available).

What incentives and tax credits are available?

A one-time federal investment tax credit (ITC) is available for multifamily solar PV systems. The credit is based on a percentage of the total solar PV system cost. If the system is placed in service before December 31, 2019, a federal tax credit of 30% of the total system cost is available. After January 1, 2020, the tax credit will start to decline. After January 2022, the tax credit will stay at a permanent 10% of the total system cost (for commercial systems only). The single-family residential solar ITC is scheduled to end on December 31, 2021.

Federal Investment Tax Credit

Placed in ServiceTax Credit Percentage
By 12/31/201930%
1/1/2020 - 12/31/202026%
1/1/2021 - 12/31/202122%
1/1/2022 - on10%*

*Only for commercial systems, with no end date defined at this time. The residential tax credit is scheduled to end on December 31, 2021.

Note: Entities planning to take advantage of the federal tax credit must have the tax liability to utilize the credit, but a portion of the credit may be carried forward if not completely usable in the installation tax year. Depending on your local utility, there may be local solar rebates or incentives available. For more information on incentives, visit DSIRE

To find out if your multifamily property is eligible to receive the federal renewable energy tax credit, or other federal tax credits, contact a tax professional.

To learn more about solar renewable energy credits (SRECs), visit SREC Markets.

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