With the numerous federal tax credits available to businesses, it’s sometimes easy to disregard green tax incentives that focus on renewable energy efforts. Employment and R&D incentives, for example, offer benefits to both businesses and the federal government.
Because of these mutual benefits, the tax savings offered by employment and R&D incentives are significant. However, what makes green building tax incentives valuable to the government? Some of the reasons the federal government provides renewable energy tax credit opportunities to businesses include:
- Environmental proponents in government argue that renewable energy is better for the earth than energy sources that produce harmful emissions.
- Renewable energy is attractive to the government because it is not a limited resource like oil or coal.
Green Tax Incentives Fuel Growth In Profitable Solar Installations
Because the solar Investment Tax Credit (ITC) has been extended over multiple years, this green building incentive has helped annual solar installation grow by over 1,600 percent since 2006. This figure represents a compound annual growth rate of 76%.
Not only does a strong renewable energy market benefit the United States, but the growth of solar energy installations makes renewable energy equipment more readily available to businesses seeking to save on energy costs. The solar ITC offers a 10%-30% tax credit to businesses that invest in solar energy, which helps fuel market growth.
Green Building Tax Incentives Help Create Jobs
A booming renewable energy market necessitates the creation of jobs for individuals qualified to manufacture and install equipment such as solar energy panels. Over the last four years, solar energy employment has grown 86%.
Additionally, the job creation rate for the solar energy market is nearly 20 times higher than employment growth in the overall economy. The creation of new jobs benefits the United States economy, so implementing federal tax credits that fuel renewable energy markets is an impactful way for the government to maintain growth.
Businesses benefit from renewable energy market growth as well. Capturing green tax credits helps companies improve their budgets and maximize tax savings.
The Cost Of Solar Energy For Consumers Continues To Decrease
Another way green tax incentives like the solar ITC are beneficial is that they lower the price of solar energy equipment. The solar ITC has had the following economic impacts:
- The existence of the ITC through 2016 ensures companies are able to make long-term investments.
- The market certainty resulting from these investments helps drive competition and innovation, and solar energy equipment manufacturers are able to provide lower prices.
- As an added benefit, your business is able to purchase solar panels at a reduced price and receive a valuable federal tax credit to fund a percentage of your investment.
The mutual benefits green tax incentives offer businesses and the federal government are driving the renewable energy business to grow at a rapid pace. Whether your business has already installed solar energy equipment or is considering making an investment, federal tax credits are available to help your company save money.
Solar energy equipment offers just one tax reward that improves your budget, as other energy-efficient changes to buildings and residences also offer opportunities to increase tax savings. Speaking with a tax expert is a beneficial first step to discovering tax credits your business should pursue.
Ready to learn more about the federal tax credits you may already be qualified to claim? Discover whether your company is eligible to capture R&D credits by taking a free quiz.
