Commercial solar in California, brokered — not sold.
Commercial property is the core of our business. We put your project out to multiple licensed California contractors, model the credit and depreciation stack without the optimism, and hand you the bids unedited. The winning contractor pays us. You don't.
The homeowner credit died. The commercial credit didn't.
This is the single most important asymmetry in solar right now, and most of the market hasn't caught up to it. Section 25D — the 30% credit every homeowner in America knows — was terminated for expenditures made after December 31, 2025. It is gone. Meanwhile Section 48E, the credit that applies to business property, is still here.
So the commercial economics that were merely good in 2024 are, relative to everything else in the market, now the best remaining case for solar in California. A hotel, a packing shed, a distribution centre or a strip retail centre can still stack a 30% federal credit against permanent 100% bonus depreciation. A house next door can't claim a cent.
Section 48E investment tax credit, at the bonus rate — available where prevailing wage and apprenticeship requirements are met, or automatically for projects under 1 MW AC. The base rate without either is 6%.
First-year bonus depreciation, made permanent by the One Big Beautiful Bill Act for qualifying property acquired and placed in service after January 19, 2025. Applied to 85% of cost where the full credit is claimed.
Available bonus adders — up to 10 points for domestic content and 10 points for siting in a qualifying energy community. Sacramento-region industrial sites qualify more often than owners expect.
The begin-construction deadline has already passed.
The One Big Beautiful Bill Act put a fork in the road at July 4, 2026. Which side of it your project sits on determines how much runway you have — and as of today, that date is behind us.
| If construction began… | The system must be placed in service by… |
|---|---|
| On or before July 4, 2026 | Roughly the end of 2030 — the four-year continuity safe harbour applies |
| After July 4, 2026 (i.e. any project starting now) | December 31, 2027 — a hard statutory date |
For a rooftop array on an existing building, December 31, 2027 is achievable — but it is not generous once you account for California reality: utility interconnection studies, an AHJ plan-check queue, structural and electrical engineering, and equipment lead times that are again lengthening. Ground mount, carport, or anything requiring a service upgrade compresses that further. The practical deadline for starting a new commercial project is considerably earlier than the legal one.
The credit is only half of it. Depreciation is the other half.
Commercial proposals routinely lead with the 30% and stop there, which understates the real after-tax cost by a wide margin. For a taxpaying entity, the depreciation deduction is frequently worth as much as the credit itself in year one.
| Component | 2026 treatment |
|---|---|
| §48E base credit | 6% of qualified investment |
| §48E with prevailing wage & apprenticeship, or under 1 MW AC | 30% |
| Domestic content bonus | +10 percentage points |
| Energy community bonus | +10 percentage points |
| Depreciable basis after claiming the credit | Cost less 50% of the credit — so 85% of cost at a 30% credit |
| First-year bonus depreciation | 100%, made permanent for property acquired and placed in service after Jan 19, 2025 |
| Five-year MACRS classification for solar | Terminated for property beginning construction after Dec 31, 2024 — full expensing now does the work instead |
| Credit monetisation, tax-exempt owner | §6417 elective pay — the credit arrives as a payment |
| Credit monetisation, taxable owner without appetite | §6418 — one-time sale of the credit to an unrelated party for cash |
Put concretely: on a $500,000 array qualifying for the full credit, a business claims a $150,000 credit and depreciates $425,000 in the first year. What that deduction is worth depends entirely on your marginal rate and your ability to use it — which is exactly why we ask for your CPA's involvement early rather than presenting a single confident payback number that assumes a tax posture we know nothing about.
USDA REAP grants are paused. Guaranteed loans are not.
The Rural Energy for America Program has been one of the strongest levers available to agricultural producers and rural small businesses — historically covering up to half of project cost, to a maximum of $1 million. It is also the single most common piece of stale information in commercial solar sales right now.
The agency announced in spring 2026 that no further grant awards would be made until new regulations are in effect. The guaranteed loan side of REAP remains open. We think that matters and we say it plainly, because a proposal built around a grant that cannot currently be applied for is not a proposal — it's a hope with a spreadsheet attached.
- If you were told a REAP grant is "basically approved," ask to see the award letter. Applications submitted before the pause are being processed on their own terms; new grant applications are not being taken.
- The guaranteed loan is still genuinely useful. It carries a USDA guarantee that improves the terms a lender will offer, and it stacks with the 48E credit and depreciation.
- Rural eligibility is broader than people assume. A surprising amount of the Central Valley, the Sierra foothills and Northern California qualifies as rural for REAP purposes — including businesses that don't think of themselves as agricultural at all.
- We will tell you when it reopens. If REAP grants resume and your project is a fit, that's a call we make to you, not a reason to delay a project that already pencils without it.
Four routes, and they are not interchangeable.
The financing decision usually has a larger effect on the outcome than the choice of panel, and it is the part of the process where an owner is most likely to be steered toward whatever the installer happens to have a relationship with.
Best after-tax return, worst on liquidity
You own the asset, you claim the credit, you take the depreciation, and there is no interest drag. It wins on a spreadsheet nearly every time. It also ties up capital that may earn more inside your actual business — which is a legitimate reason to choose something else, and not a reason for anyone to pretend the returns are equivalent.
Long, fixed, and under-used
The SBA 504 program treats energy projects as a public policy goal, which raises the debenture ceiling and can allow more than one project loan. Long amortisation at a fixed rate on owner-occupied property is a strong structural match for an asset that produces for twenty-five years. Occupancy and size tests apply.
Assessment-based, transfers with the property
Financing repaid through a voluntary property tax assessment, available in much of California. Terms run long, the obligation generally transfers on sale, and it can cover work adjacent to the array. It requires lender consent on any existing mortgage — get that conversation started early, because it is the usual point of failure.
The property types we see succeed.
Commercial solar rewards a specific profile: heavy daytime consumption, a large unshaded roof or adjacent ground, a demand charge worth attacking, and an owner who intends to hold the asset. Where those line up, the case is strong. Where they don't, we would rather say so early. One property type has enough of its own rulebook — VNEM tenant allocation, SOMAH, the split-incentive problem — that we gave it its own page: solar for apartment buildings and multifamily properties.
Hotels & motels
Round-the-clock HVAC, laundry, kitchen and pool loads on a flat roof with nothing on it. Franchise property improvement plans often force capital spend anyway, which makes solar easier to schedule alongside a renovation than to justify on its own. Multi-property owners get the added benefit of one bid process across the portfolio.
Farms, packing & processing
Irrigation pumping, cold storage, hulling and packing loads that peak exactly when the sun is up. Ground-mount space is usually not the constraint. This is also where REAP mattered most — see the honest position on that above. Ag has enough of its own rulebook — tariffs, meter aggregation, the Williamson Act — that we gave it its own page.
Warehouse, cold storage & light manufacturing
The classic case: enormous roof, high load factor, and demand charges that storage can shave. Cold storage in particular has a load shape that solar plus batteries fits unusually well. Structural capacity and roof age are the two things we check before anything else.
Retail, QSR & franchise portfolios
Ten similar buildings across three utility territories is a different problem from one building — the right answer varies site by site because the tariffs do. We scope the portfolio, rank the sites by return, and phase the rollout rather than treating them as one undifferentiated block.
Nonprofits, schools, tribal & municipal
Elective pay under §6417 converts the credit into an actual payment for entities with no tax liability, which changed the arithmetic for this category entirely. It carries filing and registration requirements that need to be handled correctly and on time — worth involving your auditor before, not after.
NNN & landlord-tenant properties
The hard case, and the one most often mishandled. If the tenant pays the utility bill, the landlord funding the array captures none of the savings without a lease amendment or a rent structure that reflects it. This is solvable, but it must be solved before the project — not after the panels are up. The full breakdown is below.
Who owns the roof, who owns the system: solar in a triple-net lease.
In a triple-net lease the tenant already pays the taxes, insurance and maintenance. Adding solar doesn't erase the landlord-tenant split — it adds a new asset that has to be assigned to one side or the other, on purpose, in writing, before anyone puts a panel on the roof.
The core split: in the most common structure the landlord funds and owns the system — and with it the credit and the depreciation. The tenant, paying the utility bill under the NNN structure, is the one who actually sees the savings each month. That mismatch is the whole reason NNN solar needs its own negotiated structure instead of bolting onto the existing lease.
- Lease amendment sharing the savings. Landlord owns and finances; the lease is amended so some or all of the reduced utility cost flows to the tenant, sometimes net of a solar surcharge that lets the landlord recover part of the investment. Ownership and tax benefits stay with the landlord; the tenant gets a reason to sign off.
- Rent or CAM adjustment. The reduced utility expense gets folded into how base rent or common-area charges are calculated. Cleaner on paper — but both sides have to agree on how "reduced cost" is measured, and re-measured, over time.
- Tenant-funded and tenant-owned. The tenant pays for and owns the system, captures the savings and the tax benefits — and must negotiate explicit removal-and-restoration terms for what happens if the lease ends, isn't renewed, or the building sells.
None of these is universally correct. Which one fits depends on lease length remaining, who has the better access to financing and tax appetite, and how much risk either side wants to carry if the relationship ends early.
What the process actually looks like.
We are a brokerage. We don't own crews, we don't hold inventory, and we have nothing in a warehouse that has to move this quarter. What we run is a competitive process on your behalf.
- Pull the real consumption data. Not a bill photo — twelve to twenty-four months of interval data from the utility, plus the tariff you're actually on. Commercial bills are mostly demand charges and time-of-use structure, and a proposal built from an annual kWh total is guessing at the part that matters most.
- Establish what the building can carry. Roof age, membrane type and remaining warranty, structural capacity, existing penetrations, main service size and available breaker space, and whether the utility service can accept the interconnection without an upgrade. A roof with six years left changes the recommendation; nobody should be mounting a twenty-five-year asset onto it.
- Write one specification and send it to multiple licensed EPCs. This is the step that makes the bids comparable. Same scope, same production assumptions, same warranty requirements, same exclusions — so the differences you see are real differences and not four contractors quietly scoping four different projects.
- Normalise the responses and hand them over unedited. You see what we see: price per watt, modelled production and the assumptions behind it, equipment and its actual warranty terms, who holds the workmanship obligation and for how long, and what has been excluded. Where a bid is cheap because it left something out, we point at the omission.
- Model the after-tax case with your CPA in the room. Credit, adders where they apply, basis reduction, first-year expensing, and the financing structure — run against your marginal rate rather than a generic one. If the honest conclusion is that the project doesn't clear your hurdle rate, that is a legitimate output of this process.
- Stay through construction and commissioning. Permit, interconnection application, structural sign-off, inspection, permission to operate. The gap between contract signature and a system that actually exports is where commercial projects go quiet, and someone should be chasing it who isn't the contractor.
- Make sure it's still producing in year three. Commercial arrays fail quietly — a dead string on a 400 kW system is a rounding error on a monthly bill and a five-figure annual loss. YES Monitor watches production across every site in a portfolio and flags underperformance instead of waiting for you to notice.
Ours is yes. The winning contractor compensates us out of the customer acquisition budget they already carry — the budget that would otherwise pay for a canvasser, a call centre, or a purchased lead. The property owner pays us nothing. More on how that works on our what is a solar broker page.
Commercial solar FAQ.
Is the 30% tax credit still available for commercial property in 2026?
Yes. Section 48E remains available to businesses even though the residential Section 25D credit terminated on December 31, 2025. The base rate is 6%, rising to 30% where prevailing wage and apprenticeship requirements are met — or automatically for projects under 1 MW AC, which covers a large share of commercial rooftop work. Domestic content and energy community bonuses can add up to 10 points each on top.
What is the July 4, 2026 deadline, and did I miss it?
It's the begin-construction date that decides your timeline. Projects that began construction on or before July 4, 2026 get roughly until the end of 2030 under the four-year continuity safe harbour. Projects beginning after it must be placed in service by December 31, 2027. That date has passed, so a project starting today is on the 2027 clock — achievable for rooftop retrofit, tight for anything involving a service upgrade or ground mount. See the timing section.
Can I still get a USDA REAP grant?
Not right now. USDA states it is not accepting REAP grant applications at this time, following its announcement that no further grant awards would be made until new regulations take effect. Guaranteed loan applications are still accepted. Anyone still building a proposal around a REAP grant is working from stale information — more here.
How does depreciation work on commercial solar?
Solar equipment is depreciable business property, and 100% first-year bonus depreciation was made permanent for qualifying property acquired and placed in service after January 19, 2025. Claiming the investment credit reduces the depreciable basis by half the credit, so a 30% credit leaves 85% of cost depreciable. The special five-year MACRS classification for solar was terminated for property beginning construction after December 31, 2024, but full first-year expensing generally more than compensates. Your CPA owns this determination, not us.
My business doesn't have the tax appetite to use a credit that size. Now what?
Two routes. Section 6418 permits a one-time sale of the credit to an unrelated party for cash — a market that now functions reasonably well, though smaller credits attract a wider discount. Alternatively a third-party ownership structure puts the credit with a developer who can use it and prices that value into your PPA rate. Which is better depends on the size of the credit and how much of its face value you'd surrender in each case.
We're a nonprofit. Does any of this reach us?
Yes — this is the change most tax-exempt organisations still haven't acted on. Section 6417 elective payment lets tax-exempt entities, state and local governments, tribal entities and rural electric cooperatives receive the 48E credit as a direct payment rather than as an offset against tax they don't owe. There are pre-filing registration steps and real deadlines, so involve your auditor before the project rather than at filing time.
Should I add battery storage?
Often, on a commercial tariff — but for a different reason than homeowners assume. The value usually isn't backup; it's demand-charge management. If a meaningful share of your bill is demand rather than consumption, storage attacks a cost solar alone can't touch. It qualifies for the same 48E credit. Whether it pencils depends on the shape of your peaks, which is a question the interval data answers directly.
Our property is on a triple-net lease. Does solar still make sense?
It can, but only if the split is addressed first. If the tenant pays the utility bill, a landlord who funds the array captures the tax benefits and none of the energy savings. The usual fixes are a lease amendment sharing the savings, a rent adjustment reflecting the reduced operating cost, or a structure where the tenant funds and owns. All of them are far easier to negotiate before the project than after — the full NNN breakdown is here.
Who actually gets the tax credit in an NNN solar deal?
Whoever owns the system generally captures the tax benefits — typically the landlord if the landlord financed and owns the array, or the tenant in a tenant-funded-and-owned structure. Ownership and who pays the utility bill are two separate questions, and the lease amendment is what ties them together. Confirm the specifics with a tax professional before assuming either way.
What happens to the solar system if the building sells or the lease ends?
Exactly what the lease says — which is why it has to be spelled out before construction, not figured out afterward. Depending on the structure, the system might transfer with the sale, be removed with the roof restored, or trigger a buyout. If none of that was negotiated up front, it isn't a plan — it's a dispute waiting for a closing date.
How long does a commercial project take?
For a straightforward rooftop retrofit, plan on several months from signature to permission to operate — design and structural, permitting, the utility interconnection application, construction, inspection, then PTO. Interconnection and plan check are the two steps outside anyone's control and the two that most often slip. Anything requiring a service upgrade, a ground mount, or a utility-side study runs materially longer, which is exactly why the December 2027 in-service date needs respecting now rather than in a year.
What does the brokerage cost us?
Nothing. The winning contractor pays us out of the sales and marketing budget they already carry for customer acquisition, and that compensation is the same regardless of which contractor you select — which is the structural reason we can hand you the bids unedited. If the honest recommendation is to do nothing this year, we're not paid either way, and we'd rather keep the relationship than sell you a project you resent.
Are you licensed?
Both of our principals hold current California Home Improvement Salesperson registrations with the Contractors State License Board — Benny Tagory HIS #116409 and Drew Kedem HIS #116408, both registered since 2018 and verifiable at the CSLB license check. We're a brokerage and don't perform installations, so the contractor's licence, the permit, and the workmanship warranty all sit with the licensed EPC you select — which is precisely why we tell you to verify theirs too.
Do you work outside Sacramento?
Yes. We're Sacramento-based and work throughout California and beyond, including portfolios spanning multiple utility territories. Because we don't own installation crews, our reach is a function of which licensed contractors are competitive in a given market rather than where our own trucks happen to be parked.
Want to see what several contractors would actually charge you?
Get a commercial assessmentListen: California Hotels Guide for Going Solar
Why a hotel's load profile — laundry, kitchens, pool plant and above all air conditioning, all running through the middle of the day — makes hospitality one of the strongest commercial solar cases in California, and how a battery attacks the demand charge that solar alone cannot reach. Recorded in 2024; the incentive positions quoted have since moved, and the notes on the podcast page say where.