Featured in April 2026, Lansing Regional Chamber of Commerce FOCUS Magazine
Federal tax credits expanded through the Inflation Reduction Act (IRA) will remain in place through 2030, giving businesses a rare window of long-term opportunity for solar investments.
For Michigan businesses—both for-profit and non-profit—installing solar panels can qualify for incentives that cover 30–60% of the total installation cost, depending on the project and eligibility factors.
Key milestones in summer 2026 and late 2027 are essential to secure tax benefits for your project and offset a significant portion of your costs.
What Solar Tax Credits Are Available?
With the original provisions of the IRA, organizations can tap into generous tax credits, direct or elective payments, and location-based incentives that reduce upfront costs and accelerate project returns. Key incentives include:
Federal Investment Tax Credit (ITC)
Eligible commercial entities receive a baseline 30% federal tax credit. The recent “Big Beautiful Bill” reestablished a 100% year-one bonus depreciation, which typically reduces payback periods by more than a full year.
Elective Pay (Direct Pay) for Nonprofits
Non-taxable entities (including schools and municipalities) receive the same 30% federal tax credit as a cash payment upon completion of the solar installation project.
Bonus Incentive Opportunities
Additional incentives may increase tax credits by 10–30%, depending on project qualifications:
- Domestic Content Bonus – Provides an extra 10% credit for using American-made panels and components.
- Energy Community Bonus – Projects located in former coal or fossil fuel zones may qualify for an additional 10% credit.
- Low-Income Communities Bonus – An extra 10% is available for projects in low-income communities or qualified low-income residential or economic benefit projects.
In many cases, multiple bonus incentives can be combined, further increasing your total savings.
Benefits for Property Owners and Tenants Alike
For owners, this results in a lasting reduction in their building’s energy costs, shielding them from rates that will rise faster than ever. The value of their property increases; property taxes cannot be raised. Systems pay for themselves multiple times before warranties expire. The returns on these projects consistently surpass those of market investments. Meanwhile, tenants benefit from more predictable operating expenses at a lower rate year after year.
Take Advantage While Incentives Last
Reach out to the Absolute Solar team to learn more about the tax incentives your business may qualify for, the potential cost savings, and financing options for your solar project. Call 517-580-5840 or visit absolutesolar.com/commercial-services/ for more details.
