2009-05-20, 13:23

IS SOLAR ENERGY A VIABLE SOURCE OF ENERGY FOR YOUR MULTIFAMILY COMMUNITY?

By: Multifamily Real Estate Industry Team
In California, at least, the answer seems to be “yes”. Multifamily property owners may combine the benefits of that state’s Multifamily Solar Housing (Mash) program with the federal investment tax credit (ITC) to cover 70 to 80 percent of the costs of a photovoltaic electricity-generating system.

As part of the recent federal stimulus package, the ITC may be taken in the form of a grant, which increases the likelihood that installing solar panels is an economically sensible investment. The net effect of the ITC and the Mash program is that solar energy users incur per-kW-hour costs that are less than conventional utility rates.

Funds allocated to state and local governments from the federal stimulus package may also be available for the installation of solar energy systems on multifamily communities, subject to the discretion of each governmental entity receiving stimulus funds. Interested parties should check in with their state and local energy departments to find out if funds are being allocated to such projects (but don’t delay, as the funds must be spent rapidly pursuant to federal legislation).

Operators of low-income housing communities may take advantage of a 9 percent low income housing tax credit and combine it with the ITC to create a substantial reduction in the cost of installation of a solar energy system.

Even if lucrative government tax and other credits and deductions are not available for a particular project, many utility companies are offering incentives that may make solar a viable option.

(This entry posted by Mark Polston, a member of Womble Carlyle's Real Estate Development group)

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