The federal deadlines, in plain terms
Under the 2025 budget law (P.L. 119-21), solar projects that began construction by July 4, 2026 generally have about four years to be placed in service. Everyone else must be placed in service by December 31, 2027 (as of September 2026; verify current terms).
IRS guidance on what counts as “beginning construction” has been in litigation: a federal court vacated Notice 2025-42 in June 2026, and the appeal status is unclear. Projects beginning construction after 2025 also face new foreign-entity-of-concern (FEOC) sourcing rules. These details decide eligibility, so plan with your tax advisor rather than rely on a rule of thumb.
Depreciation and the rest of the stack
100% bonus depreciation was permanently restored for property acquired and placed in service after January 19, 2025. For a profitable business, deducting most of the system’s basis in year one can matter as much as the credit. Ask your CPA — basis adjustments and your tax position change the answer.
Colorado exempts solar modules, inverters and racking from state sales tax. Local utility incentives vary; Black Hills Energy, for example, has offered a production incentive for commercial systems of 25–250 kW.
Why demand charges change the design
Many commercial rates bill you for your highest 15-minute demand of the month, not just total kWh. Solar reduces energy charges reliably but may barely touch a demand peak that happens at 6 pm or on a cloudy afternoon.
We start with 12 months of interval data when your utility can provide it. If demand charges are a big share of your bill, pairing solar with storage is often worth modeling — see our commercial storage page.
Roofs, net metering and system size
Flat commercial roofs usually take ballasted or low-penetration racking, and roof age matters even more than on homes because commercial reroofing around an array is costly. Colorado net metering generally covers systems sized to your on-site use, and co-op rules guarantee net metering for commercial systems up to at least 25 kW; larger systems depend on your utility’s tariff.
FAQ
Questions we hear
What’s the deadline to get the federal credit on commercial solar?
As of September 2026, placed in service by December 31, 2027, unless construction began by July 4, 2026. Construction-start rules are in flux after a June 2026 court ruling, so confirm with your tax advisor.
Can I use bonus depreciation and the credit together?
Generally yes, with a basis reduction for part of the credit. How much benefit you get depends on your tax situation — ask your CPA.
Will solar reduce my demand charges?
Sometimes a little, often not much. Demand peaks frequently happen when solar output is low. Storage is the tool built for demand charges.
We lease our building. Can we still go solar?
Possibly, with the landlord’s agreement. Lease terms need to cover roof access and who keeps the system if you leave. We can talk with both parties.
How big a system can we install?
It depends on roof space, your annual usage and your utility’s net-metering and interconnection rules, which differ for co-ops, municipal utilities and Xcel.