WCN April 2019

The Future
of Solar
in Agriculture
By KATHY COATNEY | Editor
THERE ARE CHANGES COMING TO SOLAR IN
next few years. One of the big changes is the investment
tax credit.
Investment Tax Credit
The Investment Tax Credit is a 30 percent credit at the
federal level that is available in all 50 states for any type of
renewable energy.
In California, this is the primary incentive available,
according to Chad Cummings, director of sales and marketing
for JKB Energy.
What this means is, if it’s a million dollar project the
grower receives an immediate tax discount of $300,000,
which is different than a write off, Cummings explained.
“This is an actual credit against whatever you’re tax liability
is,” Cummings said, adding it’s basically a 30 percent off
price tag.
This incentive has been available for years, but starting
2020 the percentage will start declining.
In 2020 it will decrease to 26 percent.
In 2021 it will decrease to 22 percent.
In 2022 and moving forward it will decrease to 10
percent indefinitely.
“That’s a pretty big drop,” Cummings said, adding this
means the net cost for solar will increase because of the
change in the incentives.
2019 will be the last year for the 30 percent rate, but
growers can lock in this rate to allow for the installation of
the solar system through 2023.
“If a farmer wants to proceed with a solar project at the
30 percent rate, he needs to essentially make a five percent
down payment on a project,” Cummings said.
By doing this, it secures the project at the 30 percent tax
credit rate, and the project doesn’t have to be completed
until the end of 2023.
Cummings expects a surge in solar installations with
growers taking advantage of the investment tax credit and
locking in the 30 percent rate.
“If you don’t make the 30 percent in 2019, you can still
lock in at 26 percent (2020),” Cummings said, adding it can
be locked in at any time until it reaches the 10 percent level.
Utility Rate Changes
The change in utility rates is another reason Cummings
believes there will be a surge in solar installations for
agriculture.
In 2017, Pacific Gas and Electric (PG&E) and Southern
California Edison (SCE) announced their intent to change
utility rate structures and shift the peak time periods into
evening hours. For PG&E, the peak time period will change
from 12-6 p.m. to either 4-8 p.m. or 5-9 p.m., for agricultural
and commercial rates.
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West Coast Nut April 2019