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Castle Energy

Commercial Solar Tax Credit

As a business owner, you should know how the commercial solar ITC works,
who qualifies, which bonus credits may apply,
and turn savings into measurable returns.

How the Federal Solar Tax Credit for Businesses Work

For qualifying commercial systems placed in service, the federal investment tax credit is 30% of eligible project costs when prevailing wage and apprenticeship (PWA) rules are met (or if the project is under 1 MW). Projects that do not meet PWA generally receive a 6% base credit. 
Beginning this year, most new projects claim the technology-neutral Clean Electricity Investment Tax Credit (§48E) instead of the legacy §48 ITC, but the practical result for solar remains similar 30% when requirements are satisfied. Castle Energy coordinates with your tax advisor to confirm which section applies based on your project’s start and in-service dates.

Bonus Adders That Can Raise the Credit Above 30%

Many commercial solar ITC projects can qualify for additional “adder” amounts:

  • Domestic Content Bonus (+10 percentage points): Projects using U.S.-made steel/iron and a required share of manufactured components may receive an extra 10 points (or 2 points if PWA/small-project criteria aren’t met). 
  • Energy Community Bonus (+10 percentage points): Additional credit if your facility is sited in a qualifying energy-community census tract. 
  • Low-Income Communities Bonus (+10 or +20 percentage points): For smaller projects (<5 MW) that receive annual allocation, depending on project category. 

Eligibility & What Qualifies (Ohio Focus)

  • Who qualifies: Corporations, LLCs/partnerships, and other businesses installing solar for trade or business use.

  • Project size: Sub-1 MW projects can access the full 30% without PWA; ≥1 MW projects must meet PWA to access 30% (otherwise, only the 6% base applies). 

  • Property types: Rooftop, canopy, and ground-mount systems; paired storage can qualify.

  • Ohio considerations: Utility rates, demand charges, and interconnection timelines for First Energy, AEP Ohio, AES Ohio, and municipal/co-op utilities to ensure projected savings are grounded in current tariffs and local permitting practices.

FAQs Commercial Solar Tax Credit

Is the commercial solar tax credit really 30% into 2026?

Yes, projects that satisfy PWA (if ≥1 MW) generally receive 30%. Under the tech-neutral rules beginning after 2024, solar remains eligible. 

Can my company sell the credit for cash?

Yes. Many taxable businesses use credit transfer ability to monetize the benefit in year one. 

Can we increase the credit above 30%?

Potentially via domestic content and energy community adders; some smaller projects may qualify for a low-income allocation. 

What forms are needed?

Your CPA typically files Form 3468 with supporting documentation we provide. 

Get a Credit-Ready Proposal

If you’re searching for commercial solar tax credit, Section 48 solar tax credit, or federal solar tax credit for
businesses, our team can deliver a compliant, numbers-driven plan. Request a consultation to see your
projected credit, any bonus adders, and after-tax cash flow.

Contact us