How Does Solar Energy Work?
1. Solar panels convert sunlight to DC current electricity
2. Inverters convert DC electricity to AC current we can use
3. Your building uses the electricity it needs
4. Net metering allows you to send unused electricity back to the grid for credits
What is Net Metering?
Even though you’ll be generating some of your own energy needs through solar energy, you’ll still be connected to the electrical grid. Because of the nature of the sun, the amount of energy you produce follows a natural bell curve throughout the day. The electricity you create through solar energy will be used to power your building immediately. At times, you may even produce more energy than you have a demand for.
Net metering allows you, as a utility ratepayer and customer, to feed the solar electricity you don’t use back to the grid and receive credits on your utility bill. You’re then only billed for the “net” energy you use from your utility.
Between generating a portion of your energy needs through solar and feeding the portion you don’t use back to the grid, you’re able to effectively lower your energy bill and reduce your environmental impact.
Tax Incentives & Depreciation
There are a variety of federal, state, and utility incentives available that encourage the development of solar energy in America. Relevant Energy helps walk you through the financing and incentive options, then handles all the necessary paperwork on your behalf.
30% Solar Investment Tax Credit (ITC)
The Solar ITC is a federal policy mechanism that supports a 30 percent tax credit for solar-energy systems. Businesses that install, develop and/or finance a solar-energy project can claim this tax credit as a dollar-for-dollar reduction in income taxes. The amount of the tax credit is based on the amount invested in the solar-energy project.
The Solar ITC is on step-down-schedule. A 30% credit is available for properties who have commenced construction by the end of 2019. The ITC will then step down in amount to 26% in 2020 and 22% in 2021. After 2021, the commercial ITC will permanently drop to 10%.
Solar-energy systems qualify for the Modified Accelerated Cost Recovery System (MACRS), of accelerated depreciation. As an asset, the cost of solar-energy equipment can be recovered through annual deductions over a period of five years.
If you are also claiming the ITC, you’re able to deduct 85% of your solar project’s depreciable basis. Through the end of 2019, qualifying solar projects are also eligible for 30% bonus depreciation, that allows you to depreciate 30% of your project’s tax basis while taking the remaining 70% under the normal MACRS schedule.
KS Dept of Commerce
The Kansas Department of Commerce also has a variety of incentives available for alternative energy, including alternative-fuel fueling station and motor vehicle tax credits.
USDA Rural Energy for America Program (REAP)
The USDA’s REAP provides funding assistance for qualifying agricultural producers and rural small businesses to purchase and install renewable energy systems, including solar. Qualifying businesses are eligible for grants and guaranteed loans.
25-Year Manufacturer’s Warranty
The solar panels Relevant Energy uses in our systems come with a 25-year manufacturer’s warranty and includes 80% degradation. The inverters we use have a 15-year warranty, with a 2-day shipping for replacements.
Electric Vehicle Charging Stations
View electric vehicle charging stations across the states of Kansas and Missouri, map a route, and more.