Dealership parking lots offer expansive unobstructed space which is ideal for housing a “solar canopy”. A solar canopy is a raised steel frame which hosts solar panels above the structure, while cars are still allowed to park underneath the structure. The solar canopy can reduce electric costs and provide other benefits to a dealership.
A solar canopy will provide shade for vehicles from the sun during the hot summer months, protecting their surfaces from damaging UV rays. Conversely, vehicles will be covered from inclement weather such as rain or snow, resulting in less cleanup of snow during the winter months thereby reducing those expenses. Furthermore, there will be less dirt and pollen accumulating on the vehicle, reducing the costs of having the exterior of the vehicles cleaned. A solar canopy can provide better light with LED lighting to showcase your inventory on a dreary day or at night. You will be providing your customers with a cleaner, drier, and overall more comfortable shopping experience, all while producing your own energy.
You might also consider providing an electric charging station powered by the energy produced from the solar canopy. This could be a useful marketing tool to attract the environmentally conscience to your store. If you are concerned that a solar canopy will look awkward, note that there are solar canopies that can be customized to look like existing structures on your property. The cost of these solar canopies has been decreasing over the last decade, so if you have been considering it, this may be the time.
In order to encourage the use of solar energy, the federal energy investment tax credit program has been put in place. Under this program, a tax credit is available for up to 30% of the cost of one of these systems. However, construction would have to commence no later than 2019 to be eligible for the full 30% tax credit. The credit lowers to 26% in 2020, 22% in 2021, and after 2021, it will permanently drop to 10%. This tax credit is a dollar-for-dollar reduction in the income taxes that the business would pay in federal taxes.
The cost of electricity seems to be constantly rising, while the cost of solar canopies has been decreasing, and the full 30% federal tax credit will expire after 2019. Now may be the best time yet for auto dealers to go green while cutting operating costs, hedging against rising energy prices, and increasing the resale value of real estate – all at the same time.
If you have any questions regarding this article, please contact Jamie Downey at JMDowney@DowneyCoCPA.com or at 800-849-6022.
