EXECUTIVE鈥橲 DESK
Commercial solar still makes sense 鈥� but the clock is ticking
Business owners frequently ask me whether the 鈥済olden era鈥� of solar has already passed. With shifting federal policy and ongoing uncertainty around energy costs, it鈥檚 a fair question.
But here in New Mexico, the reality is clear: commercial solar remains one of the most stable, high-return investments available today. What has changed is not the value 鈥� it鈥檚 the timeline.
Turning energy into a controlled asset
Electricity is one of the few major business expenses that is both unavoidable and unpredictable. Rates fluctuate, regulations evolve, and long-term forecasting becomes increasingly difficult.
Solar flips that equation.
By installing a solar system, a business essentially pre-purchases 25 to 30 years of electricity at a fixed, lower cost. What was once a volatile expense becomes a predictable asset.
In today鈥檚 environment 鈥� where labor, materials and insurance costs continue to rise 鈥� that kind of cost control is not just attractive; it鈥檚 strategic.
The financial case is still strong
As of April, commercial solar projects can still take advantage of a powerful stack of incentives led by the federal Investment Tax Credit, or ITC.
At its core, the ITC allows businesses to claim 30% of a project鈥檚 total cost as a dollar-for-dollar tax credit. For many commercial installations, that translates into a six-figure benefit.
Beyond the base credit, several additional provisions further strengthen the financial case:
100% bonus depreciation: Businesses can deduct the full cost of the system in the first year 鈥� after adjusting for the ITC 鈥� creating immediate tax savings and improved cash flow.
Bonus 鈥渁dders鈥� (10鈥�20%): Projects located in designated energy communities or low-income areas may qualify for additional credits.
Direct pay option: Nonprofits and tax-exempt organizations can receive the 30% credit as a direct payment from the IRS, opening the door for schools, churches and municipalities.
At the state level, New Mexico continues to offer a 10% Solar Market Development Tax Credit, along with full exemptions from sales and property taxes on solar installations.
Taken together, these incentives make the economics of commercial solar highly compelling 鈥� even before factoring in long-term energy savings.
But the rules 鈥� and the deadlines 鈥� have changed
Recent federal legislation has added both complexity and urgency.
To qualify for the full 30% ITC, commercial projects must now meet one of two key deadlines:
Begin construction by July 4, 2026.
Be placed in service by Dec. 31, 2027.
These are not casual benchmarks. For commercial systems, 鈥渂eginning construction鈥� involves engineering, permitting, interconnection approvals and equipment procurement 鈥� all of which take time.
Waiting too long to start the process could mean missing the window entirely.
Additionally, new compliance rules 鈥� particularly around Foreign Entity of Concern restrictions 鈥� require that system components and financing sources meet stricter sourcing standards. This adds another layer of due diligence that must be addressed early in the process.
In short, solar is still an excellent investment, but it is no longer a last-minute decision.
A competitive advantage in disguise
While the financial incentives are significant, the long-term business impact goes even further.
Lower and more predictable energy costs improve margins, increase operational flexibility and provide a hedge against future rate hikes. For many businesses, that translates into a meaningful competitive advantage.
There is also a growing expectation 鈥� from customers, employees and investors 鈥� that companies demonstrate responsible, forward-looking practices. Solar is a visible, credible way to do exactly that.
But even without the sustainability narrative, the numbers stand on their own.
The bottom line
The 鈥済olden era鈥� of solar has not passed 鈥� but it is evolving.
The incentives remain strong. The returns remain compelling. And the opportunity is still very real for commercial property owners in New Mexico.
What has changed is the urgency.
With key federal deadlines approaching in 2026 and 2027, the window to capture the full financial benefits is narrowing. Businesses that plan ahead and act early will be in the best position to take advantage.
Those who wait may find that the opportunity 鈥� along with a substantial portion of the incentives 鈥� has passed them by.
In business, timing is everything. With commercial solar, that has never been truer.
Glenn Felty is the founder and CEO of SunState Solar Inc. Executive鈥檚 Desk is a guest column providing advice, commentary or information about resources available to the business community in New Mexico. To submit a column for consideration, email mnarvaiz@abqjournal.com.
