Understanding the economics of solar is key to making a smart investment.
Before you commit to a solar project, it’s important to understand the financial side: what it costs, what incentives are available, how you can pay for it, and how to evaluate the long-term value. In this section, we break down the major drivers of project cost, explore current federal and state incentives, explain financing options for both for-profit and nonprofit organizations, and introduce the concept of Levelized Cost of Energy (LCOE) to help you compare solar against your current utility rates. By the end, you’ll have a clearer picture of how solar can fit your organization’s financial goals.
What You’ll Find in This Section:
- 4.1 What Determines the Cost of a Commercial Solar Project?
Learn what factors influence the price of a solar project, how system type affects cost, and why one-size-fits-all pricing rarely applies in commercial solar. - 4.2 What Solar Incentives Are Available, and How Do They Work?
Discover the latest updates on the federal Investment Tax Credit (ITC), bonus depreciation, state-level programs, and how tax-exempt entities can benefit through Direct Pay. - 4.3 What Are My Options for Financing a Commercial Solar System?
Explore different financing structures – cash, PPA, lease, PACE, and nonprofit-friendly tools like CollectiveSun (for example) – and how each impacts ownership and returns. - 4.4 What Is Levelized Cost of Energy (LCOE), and Why Does It Matter?
See how LCOE helps you compare the lifetime cost of solar to rising utility rates and why many organizations choose solar as a hedge against future energy expenses.