As a small business owner who is concerned about the effects of climate change, I am always looking for ways to reduce my carbon footprint. I work from home mostly, so when my heating and air conditioner crapped out this past fall, I wanted to see what options were available, and I was thrilled to update my A/C with an energy-efficient heat pump. I was also able to take advantage of some local rebates provided by my energy utility, as well as some federal and state tax incentives for upgrading to a heat pump. This got me thinking, are most small business owners even aware of the tax incentives they could be taking advantage of while also reducing their carbon footprint?
Additionally, Congress recently passed the Inflation Reduction Act (IRA) to fight the climate crisis, grow domestic clean energy production, lower prescription drug costs, expand access to affordable health care coverage, and raise taxes on high-earning corporations.
Next on my quest to reduce my carbon footprint and own a fossil-fuel free home is to upgrade my tankless water heater, which uses natural gas, with a hot water heat pump. Once that project is complete, I will install solar panels on my roof and start my search for a used electric vehicle. Fossil-fuel freedom is in sight, which I am stoked about, but I also wanted to make sure other small business owners were aware of some incredible rebates and tax incentives. NC State University has created the Database for State Incentives for Renewables & Efficiency and all you have to do is type in your zip code to see what’s available where you live and work.
I also came across a super helpful article the simply breaks down the Federal Incentives available for small businesses. Below is the list provide in the Green Business Network article…
Clean Energy
“With the IRA, small businesses can benefit from savings on installing solar panels and other energy efficient projects. Overall, there’s a potential for ~70% tax savings in various amounts and ways by utilizing clean energy.
Check out these small business tax credits for energy efficiency:
- 30% tax credit for installation of solar PV systems, ranging for 10 years (2022-2032) with no maximum that can be claimed.
- Make it in America: This new provision offers tax credits for the use of American-made equipment for clean energy production.
- There are bonus credits for businesses that pay workers a prevailing wage* and use registered apprenticeship programs.
- 10% tax credit for clean energy projects in underserved communities.
- Per the White House, these projects must be “established in communities that have previously relied upon the extraction, processing, transport, or storage of coal, oil, or natural gas as a significant source of employment, creating jobs and economic development in the communities that have powered America for generations.”
- 20% tax credit for solar projects on federally-subsidized affordable housing projects and a 10% bonus credit for solar projects in low-income communities.
- $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
- Expands the Rural Energy for America program, providing rural agricultural producers with clean energy and energy efficiency upgrades.
- This is estimated to reach over 41,500 small businesses and farms, as well as over $9 billion for rural electric cooperatives.
- The IRA offers a tax credit “covering 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models.”
To get started on your business’ clean energy journey, check out the Green Business Network’s guide on How to Improve Building Energy Efficiency Rating in the Office and at Home.”
I hope this information is helpful, and if you are a small-to-medium business owner interested in boosting your profits by measuring & improving sustainability performance and effectively communicating your sustainability achievements, contact us today!
