Are Cannabis Farms Eligible for the Solar Tax Credit?

The federal solar tax credit is one of the primary benefits of commercial solar. The solar tax credit—also known as the solar Investment Tax Credit—allows businesses that install commercial solar panels to reduce their federal tax liability by 30% of their total installation costs.

The commercial solar tax credit is available to any business that’s located in the United States or its territories and pays US federal income taxes, including legally operated cannabis farms.

What Is the Commercial Federal Solar Tax Credit in 2022?

The federal solar tax credit is a commercial solar incentive that’s available to businesses operating within the United States. It aims to make commercial solar installation easier and more affordable by allowing businesses to claim 30% of their total solar installation costs as a credit on their federal corporate income taxes. All types of commercial solar systems are eligible for the tax credit, including off-grid solar systems and microgrids.

The solar tax credit was introduced in 2005 and has been extended several times, most recently by the Inflation Reduction Act of 2022.

The Inflation Reduction Act and the Solar Tax Credit

The Inflation Reduction Act (IRA) increased and extended the federal tax credit for commercial solar systems. The credit is still on a step-down schedule but will be available at its full 30% rate for an additional ten years, until 2032. The current solar tax credit schedule for commercial solar installation is as follows:

  • 2022-2032: 30% tax credit
  • 2033: 26% tax credit
  • 2034: 22% tax credit
  • 2035 and beyond: 10% tax credit

To claim the credit in a given tax year, your system must be fully installed and placed in service before the end of that tax year. The credit is retroactive to 2022, so if you already installed solar for your cannabis farm and were planning to claim the old 26% solar tax credit in 2022, you can now claim the new 30% credit.

What Is the Commercial Federal Solar Tax Credit in 2022?

Almost all material and installation costs are eligible for the business solar tax credit, including: 

  • Solar PV panels, inverters, and racking systems 
  • Step-up transformers, circuit breakers, and surge arrestors
  • Solar batteries 
  • Sales and use taxes on solar equipment
  • Solar installation costs

Commercial Solar Installation for Cannabis Farms in California 

If you want to cut your operating costs and increase profits while protecting your farm and grow rooms against blackouts, solar is the right choice for your operation. Six Rivers Solar can help you take advantage of California commercial solar incentives, including the 30% federal solar tax credit, when you install commercial solar at your cannabis farm. We are a 100% locally owned and operated commercial solar company based in Eureka and serving growers throughout the Emerald Triangle. Our team knows the area well and can be trusted to install your system quickly and efficiently, without disrupting your operation.

Get a 30% tax credit when you install solar at your cannabis farm. Call 707-443-5652 or contact us to schedule a free consultation.