On July 4, 2025, the U.S. government passed what many are calling the most disruptive clean energy law of the decade—the One Big Beautiful Bill Act (OBBBA). While it primarily targets residential solar tax credits, the ripple effects are already making waves in the commercial solar landscape, especially in innovation-forward regions like San Diego, California.
San Diego isn’t just another sunny city—it’s a renewable energy leader with aggressive climate targets and rising utility rates that continue to pressure commercial property owners. With nearly 300 sunny days per year, a robust business infrastructure, and a civic push toward sustainability, local businesses across sectors—from churches and dealerships to multifamily and industrial developers—now face a tightening window to secure top-tier solar incentives before the rules change.
While residential solar incentives are set to vanish, commercial entities are still eligible for generous federal tax credits and rebates—but only if they act quickly.
Here’s what we’ll explore:
- What the OBBBA actually says and why it matters for commercial projects.
- Sector-specific solar opportunities in San Diego, from multifamily housing to car dealerships.
- How EIP Consulting helps businesses navigate policy, permitting, and procurement with speed and strategy.
- What every commercial solar project must do before December 31, 2025, and why July 4, 2026, is your next critical deadline.
Read more about San Diego’s Climate Action Plan
What Is the “One Big Beautiful Bill” (OBBBA) and Why It Matters for Commercial Solar?
The One Big Beautiful Bill Act (OBBBA), passed on July 4, 2025, is one of the most consequential clean energy laws in recent memory. While its headline feature is the elimination of the residential solar tax credit (Section 25D), the bill carries significant downstream implications for commercial solar developers and property owners—especially those looking to lock in high-value tax benefits before they phase out.
At its core, the OBBBA marks a political and economic pivot. The federal government is redirecting funding away from consumer-level solar incentives and doubling down on large-scale energy infrastructure and utility-managed solar expansion. For commercial property owners, that means a shortened opportunity window to capitalize on today’s federal incentives—while navigating stricter qualification timelines.
Key Takeaways from the Bill:
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End of the Residential Tax Credit (Section 25D):
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Starting January 1, 2026, homeowners can no longer claim the 30% federal Investment Tax Credit (ITC) on solar systems they own outright.
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This change does not impact commercial systems directly, but it could shift contractor availability and increase costs for commercial jobs due to supply-demand rebalancing.
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Commercial Solar Incentives (Section 48E) Remain—But with a Deadline:
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Commercial entities still qualify for the clean electricity ITC, but only if construction begins before July 4, 2026.
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To receive the full benefit (typically 30%), your system must be placed in service within four years of project commencement.
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No Grace Period or Phase-Out Curve:
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Unlike previous legislation, the OBBBA offers no step-down period. The changes are binary and abrupt—making 2025 the final full year to prepare and act under the current system.
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Leased Systems Stay Eligible:
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While homeowner-owned systems lose the credit, leased residential and all commercial systems remain eligible. This detail preserves the value of PPA (Power Purchase Agreement) and leasing strategies for commercial developers.
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Full IRS Guide to Clean Energy Tax Credits (Sections 25D & 48E)
U.S. Department of Energy Summary of Commercial Incentives
Why San Diego Businesses Need to Move Now:
San Diego’s commercial solar environment is competitive, and permitting timelines can stretch several months. With the clock ticking on federal incentives and supply chain bottlenecks expected from the residential sector’s sudden collapse, local businesses can’t afford to “wait and see.”
EIP Consulting encourages all commercial clients to begin project feasibility studies and financial modeling in Q3 2025 to ensure timely ground-breaking by early 2026. This allows clients to:
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Lock in 2025-level incentives
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Secure installer bandwidth before residential overflow hits
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Take full advantage of energy community, domestic content, and low-income bonuses, where applicable
Pro tip: The IRS “begin construction” clause includes safe harbor provisions such as equipment deposits and signed contracts. These can be used to your advantage if project timelines extend into 2026.
Impacts on the Commercial Solar Sector
Although the One Big Beautiful Bill (OBBBA) directly eliminates the residential solar tax credit, its secondary impacts will be deeply felt across the commercial sector. For businesses, developers, and institutional property owners, the law creates a compressed timeline to secure federal tax credits, raises the urgency around project readiness, and could impact solar pricing and contractor availability through market ripple effects.
While commercial tax credits under Section 48E remain intact, the construction commencement deadline of July 4, 2026, introduces a hard stop for eligibility. Any delay in planning, permitting, or procurement could place projects at risk of missing this critical federal deadline. This makes 2025 a make-or-break year for new projects across California and particularly in high-cost energy markets like San Diego.
Commercial Solar Incentives: What Still Applies
Despite the shift in residential policy, commercial property owners still benefit from robust federal incentives—if they act within the required timeframe. Key elements include:
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Investment Tax Credit (ITC) under Section 48E
Eligible commercial systems may claim a 30% federal ITC if:-
Construction begins before July 4, 2026.
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The system is placed in service within four years of construction start.
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Bonus Incentives for Qualified Projects
In addition to the base 30%, your commercial project may qualify for supplemental credits:-
Energy Community Bonus (10%) – for projects in communities affected by fossil fuel employment shifts.
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Domestic Content Bonus (10%) – for projects using U.S.-manufactured solar components.
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Low-Income Community Bonus (up to 20%) – for projects serving disadvantaged communities or affordable housing.
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Depreciation Benefits
Eligible commercial solar systems also qualify for accelerated depreciation under the Modified Accelerated Cost Recovery System (MACRS), allowing for additional financial return.
Market Disruption and Competitive Pressure
In San Diego, where utility rates are among the highest in the country, commercial solar remains a financially strategic move. However, the post-OBBBA environment introduces several challenges that make early action essential:
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Surge in Commercial Demand: With residential solar incentives vanishing, many contractors will shift focus to the commercial market. This may lead to:
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Increased labor demand and installation costs.
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Longer permitting timelines due to higher application volume.
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Equipment Price Fluctuations: Supply chain contracts negotiated under residential scale may be reevaluated, potentially raising hardware costs for commercial developers unless materials are secured early.
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Permit Processing Delays: Cities like San Diego, known for complex zoning and permitting regulations, may see additional slowdowns as project volumes rise.
To mitigate these challenges, commercial stakeholders should take steps to initiate project scoping and qualification before the end of 2025. Pre-approval processes, utility interconnection applications, and contractor agreements must be strategically timed to avoid missing eligibility deadlines.
Time-Sensitive Strategy for Businesses
For commercial property owners, developers, and operators in San Diego, timing is no longer a flexible consideration—it is a defining factor in whether a solar project qualifies for significant financial incentives or loses access altogether. The One Big Beautiful Bill has compressed the incentive window into a narrow runway, placing immense importance on project readiness heading into 2026.
Businesses must approach 2025 as a pivotal execution year, not just for project ideation but for firm action. Given the deadline for construction commencement under Section 48E—July 4, 2026—any project still in planning mode by early 2026 risks falling behind schedule. Moreover, securing full incentives requires not only starting construction by this date but also completing installation within four years, adding a layer of urgency to pre-construction activities such as feasibility analysis, permitting, interconnection applications, and vendor selection.
Recommended Timeline for Commercial Projects
To align with federal deadlines and avoid the rush that will likely emerge in mid-2026, commercial clients should adopt a front-loaded project schedule. A suggested timeline might include:
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Q3 2025 – Feasibility and Financial Modeling
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Conduct site audits, consumption analysis, and structural reviews.
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Evaluate financing options: purchase, lease, or PPA.
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Engage with consultants such as EIP Consulting to develop ROI models, secure utility usage data, and forecast savings.
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Q4 2025 – Engineering, Permitting, and Procurement
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Secure interconnection agreements with San Diego Gas & Electric (SDG&E).
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Apply for local and state permits; timelines in San Diego can range from 4 to 12 weeks.
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Source major components (panels, inverters, racking) to meet safe harbor construction thresholds.
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Q1–Q2 2026 – Break Ground and Begin Installation
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Mobilize contractors, finalize inspection readiness.
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Begin physical construction to establish the IRS-defined “beginning of construction” and lock in credit eligibility.
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Key Action Items to Prioritize Now
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Energy Audit and Solar Viability Review: Don’t assume your property qualifies—get a third-party audit to confirm solar feasibility and grid compatibility.
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Secure Utility Data and Load Profiles: SDG&E typically requires load history and interval data for interconnection approvals. Acquiring these early can prevent weeks of delay.
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Review Ownership vs. Leasing Strategy: Tax credit structures and cash flow implications differ dramatically between owning and leasing a system. Determine your optimal path early.
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Engage Stakeholders Early: For multifamily, nonprofit, or corporate-owned buildings, early buy-in from boards, tenants, or finance teams avoids internal bottlenecks later on.
With a properly sequenced plan and early investment in pre-construction work, businesses can enter 2026 with confidence—and avoid the pricing volatility and processing delays that are expected to intensify as the federal deadline approaches.
Market Focus: Commercial Sectors That Need to Act Now
The urgency created by the One Big Beautiful Bill applies to the entire commercial sector, but certain industries—particularly those with high energy loads, fixed operating budgets, or regulatory pressure—have more to gain by acting quickly. In San Diego, where energy rates are among the highest in the nation, solar adoption is not just about sustainability—it’s a financial necessity.
Here’s how six key verticals stand to benefit the most from commercial solar installations under the current incentive structure and why they must act before the July 2026 construction deadline.
1. Churches and Nonprofits
Faith-based organizations and nonprofit institutions often operate on constrained budgets, making utility bills a significant cost center. With limited capacity to raise revenue, reducing operational expenses through solar power presents a stable and predictable financial advantage.
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Most churches are unoccupied at night, allowing daytime solar generation to offset peak demand charges.
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Grants, low-interest loans, and community solar programs can significantly reduce out-of-pocket expenses.
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Leasing models and Power Purchase Agreements (PPAs) allow these organizations to go solar with minimal upfront capital.
Organizations serving low-income or disadvantaged communities may qualify for an additional 10–20% federal incentive bonus under the Low-Income Communities Bonus Credit Program.
2. Auto Dealerships
Dealerships are energy-intensive operations. Showroom lighting, HVAC loads, and outdoor lot illumination result in steep utility bills. Moreover, the rise of electric vehicles (EVs) presents a new opportunity—and challenge—for grid power management.
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Dealerships benefit from large, flat roof space and covered parking areas ideal for solar arrays and carport structures.
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EV charging stations powered by solar reduce grid demand and enhance the dealership’s green branding.
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Federal and state EV infrastructure incentives may be stacked with solar tax credits to offset installation costs.
For more on California’s clean vehicle rebates and infrastructure programs, see here.
3. Multifamily Properties
Landlords and property management firms in San Diego are increasingly under pressure to offer “green amenities” to attract tenants. Multifamily housing, especially those serving low-income tenants, is uniquely positioned to benefit from solar incentives.
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Solar can power common areas (laundry rooms, lighting, security systems) and reduce building operating expenses.
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When paired with smart meters, benefits can be extended to tenants, improving retention and perceived value.
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Projects located in energy communities or DACs (disadvantaged communities) may qualify for stackable bonus credits.
4. Manufacturing and Industrial Sites
Industrial buildings consume large, continuous loads of electricity—often during daylight hours, making them ideal candidates for solar adoption. Given the scale of these systems, the financial ROI is particularly compelling.
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Large roof areas provide ample surface for solar panel deployment.
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Businesses may integrate battery storage for peak shaving and demand response programs.
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Accelerated depreciation and MACRS benefits deliver rapid return on capital investment.
5. Office Buildings
With hybrid work stabilizing, many commercial office buildings remain under-occupied yet continue to incur high base load energy costs. Solar can be a differentiator in sustainability certifications and tenant retention strategies.
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Mid-size and large buildings can offset daytime HVAC and lighting loads.
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LEED points and ESG reporting enhancements make solar investment a strategic move.
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Owners with long-term leasing arrangements can benefit from PPA structures without large upfront cash outlays.
6. Builders and Contractors
For real estate developers, the sunsetting of incentives presents both a risk and a strategic advantage. New construction projects that incorporate solar today will qualify under 2025 rules and avoid costly retrofits later.
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Solar systems can be built into project financing and transferred to buyers.
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Energy-efficient buildings command higher sale prices and lower long-term maintenance costs.
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By designing solar from the outset, developers avoid permitting redundancies and upgrade expenses.
Developers building in or near Energy Communities or designated DACs (Disadvantaged Communities) may benefit from the maximum federal stackable bonus of up to 50% ITC under certain conditions.
Spotlight: Carport Solar Installations in Commercial Settings
While rooftop solar often receives the most attention, solar carports have become a high-impact, dual-function solution for commercial property owners seeking to maximize energy savings, tenant comfort, and land use. In densely developed areas like San Diego, where usable roof space may be limited or building codes restrictive, carport systems offer an elegant alternative that delivers both form and function.
Unlike rooftop systems, solar carports are structurally engineered canopies installed over parking lots. These systems allow businesses to turn underutilized asphalt surfaces into clean energy generators, while simultaneously providing shade, weather protection, and improved aesthetics.
Why Carports Make Strategic Sense
Solar carports are particularly well-suited for a variety of San Diego-based commercial sectors, including auto dealerships, office parks, hospitals, retail centers, and school campuses. Their versatility and visibility also make them ideal for organizations looking to showcase sustainability in a tangible, physical form.
Key advantages include:
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Energy Production Without Rooftop Constraints
Not all buildings are structurally suited for solar. Carports allow businesses to sidestep costly structural reinforcements or roof replacements. -
Dual-Purpose Functionality
Carports not only produce clean energy but also provide:-
Shaded parking for employees and customers.
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UV protection that extends vehicle life and reduces interior temperatures.
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Enhanced curb appeal and customer experience.
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Compliance with Green Building Standards
Solar carports can help commercial properties meet LEED certification criteria and city sustainability mandates. -
Optimized Orientation and Tilt
Unlike rooftops, carports can be engineered for maximum solar exposure, improving overall system efficiency.
Installation and Design Considerations
Successful deployment of carport systems involves a series of planning, engineering, and permitting phases. EIP Consulting works closely with property owners to manage every step of the process, from feasibility analysis through final installation.
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Structural Engineering: Carports must be designed to local seismic codes, especially in Southern California. Foundation anchoring and column spacing must accommodate traffic and ADA regulations.
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Utility Interconnection: Carport systems are grid-tied like any commercial solar project and require SDG&E interconnection approval. Early application submission is critical.
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Lighting and Drainage Integration: Many carports are integrated with LED lighting, security cameras, and proper water drainage systems to improve site functionality and safety.
For more on structural and electrical design of solar carports, the U.S. Department of Energy offers a solar parking canopy guide.
Real Estate and Long-Term ROI Benefits
Carport solar installations can significantly increase the operational value of a commercial property. In some cases, they may also open the door to additional revenue streams, such as:
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EV charging stations powered by solar
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Advertising space on canopy surfaces
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Tenant bill-back models for shaded reserved parking
Moreover, these systems remain eligible for:
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The 30% federal Investment Tax Credit (ITC)
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Bonus credits for domestic content, energy communities, or low-income geographies
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Accelerated depreciation under MACRS
As part of a broader solar deployment strategy, solar carports often serve as a cost-effective extension of rooftop installations—especially in facilities where energy consumption exceeds what a roof-mounted system alone can deliver.
EIP Consulting – Your Strategic Partner in Commercial Solar
Navigating the complexities of commercial solar development—especially in a post-OBBBA environment—requires more than a basic contractor. It demands a strategic, multidisciplinary partner who understands not just solar engineering, but also tax law, permitting, financing, incentive qualification, and stakeholder management.
That’s where EIP Consulting stands apart.
With over $100 million in commercial solar assets delivered across California, EIP Consulting brings unmatched expertise to San Diego’s commercial, nonprofit, and institutional sectors. Our team specializes in helping property owners, developers, and organizations make smart, timely decisions that reduce project risk and maximize financial return.
Our Core Services Include:
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Feasibility Assessments and Utility Analysis
Every project begins with a comprehensive review of your energy usage, site potential, load profile, and available incentives. We provide clear ROI modeling tailored to your financial goals. -
Incentive Stacking and Tax Strategy
We ensure our clients capture every available dollar through:-
Federal ITC and stackable bonus credits
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Accelerated depreciation and safe harbor strategies
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Local and state-level solar rebates
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Contractor and EPC Vetting
Not all solar developers are created equal. We match clients with vetted, proven engineering, procurement, and construction (EPC) partners who are licensed, insured, and performance-backed. -
Permitting and Utility Interconnection Support
San Diego’s permitting and SDG&E interconnection processes are notoriously complex. Our project managers navigate every approval, zoning code, and utility form—so you don’t have to. -
Turnkey Project Oversight
From design to energization, we act as your dedicated advocate, ensuring timelines are met, quality is maintained, and deliverables are achieved.
Why San Diego Businesses Choose EIP
Our clients range from nonprofit organizations and auto dealerships to industrial manufacturers and mixed-use developers. What unites them is a need for speed, precision, and confidence in their investment—and that’s exactly what EIP Consulting delivers.
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Local Expertise: We understand San Diego’s building codes, permitting delays, and utility challenges.
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Custom-Tailored Plans: No cookie-cutter templates—each engagement is tailored to your property, sector, and financial goals.
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Total Lifecycle Support: We remain involved long after installation, monitoring performance and supporting any audit or rebate verification needs.
Featured Success Snapshot
Multifamily Retrofit in San Diego (2024)
A 500 kW solar array installed on a 200-unit apartment complex delivered:
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80% reduction in common area utility costs
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Estimated $110,000 in annual savings
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Full ROI projected in 4.2 years
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Bonus incentives from low-income and energy community designations added 20% to the tax credit value
This project succeeded because the client began early—Q2 2024—with full feasibility support and a staggered development timeline to lock in pre-OBBBA incentive structures.
Financial Planning: How to Maximize Tax Benefits Before They Expire
For businesses exploring solar, the difference between acting in 2025 and waiting until 2027 could represent hundreds of thousands of dollars in lost tax credits and rebates. The One Big Beautiful Bill has made it clear: timing is now critical, and financial planning is the foundation of a successful solar investment strategy.
Understand the Value of the Investment Tax Credit (ITC)
The 30% commercial ITC (Section 48E) remains fully available, but only for projects that begin construction before July 4, 2026. To qualify, businesses must demonstrate physical construction or satisfy “safe harbor” provisions, such as:
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Paying at least 5% of total project costs toward equipment or materials in 2025 or early 2026
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Signing binding contracts with developers or contractors
Pairing the ITC with accelerated depreciation (MACRS) allows businesses to write off the system value over five years, resulting in:
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Immediate first-year tax offsets
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Reduced taxable income
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Lower total project payback time (typically 3–6 years for commercial systems)
For IRS ITC eligibility details, see here
Ownership vs. Leasing: What’s Right for You?
The structure of your solar investment determines how and when you benefit from incentives:
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Outright Purchase
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You receive the full ITC and depreciation benefits.
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Best for businesses with tax liability and long-term ownership horizons.
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Operating Lease or PPA (Power Purchase Agreement)
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A third-party owns the system; you pay a fixed or indexed rate for the energy produced.
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Ideal for nonprofits, churches, or entities with limited tax appetite.
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EIP Consulting works with each client to structure the most tax-efficient ownership model, often coordinating with accountants or CFOs to optimize cash flow projections and post-installation benefits.
Bonus Credits and Special Programs
Projects may qualify for bonus ITC percentages if located in or serving:
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Low-income communities (10–20% additional credit)
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Former fossil fuel or energy transition zones (10% bonus)
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Installations using U.S.-manufactured solar equipment (10% bonus)
EIP Consulting maps each project against federal eligibility zones to capture the maximum allowable credit stack.
Ready to Move Forward?
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Schedule a Feasibility Consultation: EIP Consulting will review your property, utility data, and potential incentives.
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Get Pre-Qualified: Learn whether your site is located in an energy community or low-income area to access bonus credits.
Your 2025 Commercial Solar Action Plan
The One Big Beautiful Bill has redrawn the solar landscape. With residential incentives disappearing and commercial deadlines fast approaching, the opportunity window for maximizing federal support is shrinking by the month. But for proactive businesses in San Diego, this moment offers a clear advantage.
With strong sun exposure, high energy rates, and state-level sustainability momentum, San Diego remains one of the most favorable environments in the country for commercial solar investment. And with strategic support from EIP Consulting, businesses can cut through complexity, unlock significant financial incentives, and achieve clean energy goals with confidence.
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Act by December 31, 2025: Complete feasibility and financial modeling.
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Begin construction by July 4, 2026: Lock in full 30%+ ITC eligibility.
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Partner with an experienced team: Avoid delays, overspending, and incentive loss.
Let’s build your solar roadmap—on your terms, in your timeline, and before the rules change.
Request a free feasibility assessment to get started.