Option One Solar

⏰ Deadline: July 4, 2026

30% ITC + 100% Bonus Depreciation

The clock on the
30% commercial
solar tax credit
is running out.

Under IRS Notice 2025-42, commercial solar projects that properly begin construction on or before July 4, 2026 may preserve a placed-in-service window all the way to December 31, 2030. Projects that start after the deadline must be placed in service by December 31, 2027 — a much tighter window.

We design and build commercial solar, carports, and battery storage for SoCal businesses. We've been family-owned since 1970. We bring spreadsheets — not closers.

Get My Commercial Tax Review → Or call (855) 502-6363
Family-Owned
NABCEP Certified
25-Yr Warranty
1,000+ Installs

Beat the July 4 Deadline

Free commercial Energy Assessment + tax-incentive model within 1 business day.

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Why July 4 matters

The federal commercial solar tax credit is still extremely valuable. Many qualifying projects may be eligible for a 30% federal Investment Tax Credit (ITC), with potential bonus adders for domestic content, energy community location, and low-income community designation. Many qualifying businesses may also be able to use 100% bonus depreciation on the first-year deduction.

But under IRS Notice 2025-42, the timing rules just got tighter. Projects that don't begin construction correctly by July 4, 2026 face a sharply shortened completion window.

Begin construction by Jul 4, 2026

Until Dec 31, 2030

Continuity safe harbor generally allows projects to be placed in service through end of 2030 to preserve full credit eligibility.

Begin construction after Jul 4, 2026

Until Dec 31, 2027

Project must be placed in service by end of 2027 or the credit may be lost. Much tighter window for engineering, permitting, and construction.

Commercial solar projects take months — utility interconnection alone can run 60–120 days. The July 4 deadline isn't a tax deadline. It's a project-planning deadline.

The federal incentive stack

Three programs you can layer on the same commercial install. Your CPA models your specific tax position — these are the levers most businesses use.

30%

Investment Tax Credit (ITC)

Under Section 48E, the Clean Electricity Investment Credit starts at a 6% base and steps up to 30% when prevailing-wage and apprenticeship requirements are met. Direct federal tax credit applied against your tax liability the year the system is placed in service.

100%

Bonus Depreciation

Under 2025 tax law changes, qualified property acquired after Jan 19, 2025 may receive 100% additional first-year depreciation. For commercial solar, the depreciable basis is typically reduced by half the ITC claimed — leaving roughly 85% of project cost available for first-year deduction.

+ Bonuses

Adders (Potentially +10% to +20%)

Additional +10 points each may be available for domestic content, energy community location, and low-income community designation (potentially +20 for the latter). Some projects may qualify for 40%, 50%, or more.

A $500,000 commercial solar project, by the numbers

Simple illustration. Your CPA will model your actual benefit based on your tax position.

Item Example Amount
Commercial solar project cost $500,000
Potential 30% federal ITC $150,000
Depreciable basis (after half-credit reduction) $425,000
Potential 100% bonus depreciation deduction $425,000
Tax savings from depreciation at 30% effective tax rate $127,500
Approximate combined first-year federal tax value ~$277,500

Does not include utility savings, demand-charge reduction, battery economics, potential bonus adders (domestic content, energy community, low-income), state tax treatment, or long-term asset value. Your CPA will model your actual numbers.

Solar + battery, designed to your site

Rooftop, ground-mount, or carport — we engineer the right system for your roof, parking layout, and structural loads. Most commercial customers add battery storage to capture demand-charge savings and improve resiliency.

Option One Solar commercial rooftop array installation

Rooftop Arrays

The most common commercial install — uses dead roof space, zero impact on parking or operations. For projects under 1.5 MW AC, the 5% safe harbor for beginning construction may still be available.

Option One Solar commercial parking lot solar carport installation

Parking-Lot Carports

Turn parking into generation. Carports deliver shaded parking (real customer-experience win) plus EV-charging integration. Larger projects qualify under the Physical Work Test for beginning construction.

Not just for-profit businesses

The commercial tax credit infrastructure includes provisions for tax-exempt and government-related entities through elective pay (also called direct pay). Eligible organizations can receive the value of certain clean energy tax credits even if they don't normally pay federal income tax.

🏢 Commercial businesses
🏭 Manufacturers & industrial
🚜 Agricultural operations
⛪ Churches & nonprofits
🎓 Schools & universities
🏛️ Municipalities & government

For-profit businesses that can't fully use the credit may also have options through transferability — selling the credit to another taxpayer. Your CPA and tax counsel must structure these correctly.

We're a real contractor, not a broker

Option One Solar has been family-owned since 1970, with deep in-house electrical, solar, roofing, and fabrication experience. We don't sub everything out and we don't sell deals to investors.

We do the engineering, pull the permits, manage utility interconnection, file applicable rebates (SGIP for storage, regional incentive programs), build the project, and stay accountable through inspection and Permission to Operate.

✓ 55+ years across electrical, solar, roofing, fabrication
✓ CSLB #985340 (C-10 / C-46)
✓ In-house fabrication for carports and support structures
✓ Tesla Certified Installer · 4.9★ on Google

Frequently Asked Questions

What's the July 4, 2026 deadline I keep hearing about?
Under IRS Notice 2025-42, commercial solar projects that properly begin construction by July 4, 2026 may use a continuity safe harbor that generally points to December 31, 2030 as the placed-in-service deadline. Projects that begin construction AFTER July 4, 2026 must generally be placed in service by December 31, 2027 — a much tighter window. Beginning construction correctly before the deadline preserves significantly more time to complete the project and still qualify for the federal tax credit.
What does 'beginning construction' actually mean?
Not what most people think. Beginning construction does NOT mean signing a proposal, getting financing approved, doing engineering, or submitting permits. For larger commercial projects, IRS Notice 2025-42 emphasizes the Physical Work Test — actual physical work of a significant nature on integral project property, either onsite or via a binding written contract for offsite work. For smaller commercial projects (generally under 1.5 MW AC), a 5% safe harbor may still be available. This is why structuring matters and why we won't wait until the last minute.
What's the tax credit actually worth?
A properly structured commercial solar project may qualify for a base 6% Clean Electricity Investment Credit under Section 48E, which steps up to 30% when prevailing wage and apprenticeship requirements are met. Additional bonus adders may apply: +10 percentage points for domestic content, +10 for energy community location, +10 or +20 for low-income community designation. Some projects may qualify for 40%, 50%, or more. Qualification depends on project location, equipment sourcing, labor compliance, and ownership structure — your CPA must verify your specific situation.
What about 100% bonus depreciation?
Under tax law changes in 2025, qualified property acquired after January 19, 2025 may be eligible for permanent 100% additional first-year depreciation. For commercial solar, the depreciable basis is generally reduced by half of the federal tax credit claimed — so if you claim a 30% ITC, about 85% of the project cost may be available for first-year depreciation. On a $500,000 project, that can mean an additional $127,500 in tax savings at a 30% effective rate, on top of the $150,000 ITC. Combined first-year federal tax value can approach $277,500 on a $500K project.
Can nonprofits, churches, schools, or government entities benefit?
Yes — through elective pay (also called direct pay). The IRS allows certain tax-exempt organizations to receive the value of qualifying clean energy tax credits even if they don't normally pay federal income tax. Eligible entities include churches, schools, nonprofits, municipalities, tribal entities, and certain government-related organizations. For-profit businesses that can't fully use the credit may also have options through transferability (selling the credit to another taxpayer). Your CPA and tax advisor must structure these correctly.
How long does a commercial solar project actually take?
A commercial solar project is not like ordering a piece of equipment. It typically involves utility bill review, interval data analysis, site evaluation, solar design, battery sizing, structural review, electrical engineering, interconnection review with the utility, permitting, equipment procurement, financing, tax planning, construction scheduling, inspection, and Permission to Operate (PTO). Realistic timelines run several months minimum for mid-sized projects, longer for larger projects. This is why the July 4, 2026 deadline is really a project-planning deadline that should be triggered now.
Do you only build for big businesses, or smaller commercial too?
Both. We design and install commercial systems from 25 kW (small office, retail, restaurants) up through several MW (industrial, agricultural, large carport arrays). The 1.5 MW AC threshold in IRS Notice 2025-42 matters because smaller projects may still use the 5% safe harbor for beginning construction. Our team has 55+ years across electrical, solar, roofing, and fabrication, with commercial work across the High Desert, Inland Empire, and North County San Diego.
Is this tax-credit information guaranteed?
No. Federal tax credits, bonus depreciation, MACRS, direct pay, transferability, and bonus adders all depend on each customer's specific facts and circumstances. Option One Solar does not provide tax, legal, or accounting advice. Customers should consult their CPA, tax advisor, and legal counsel before relying on any tax incentive or projected tax savings. We design the system and document the construction-start activities; your tax team certifies the credit eligibility.

Important tax disclaimer

Option One Solar does not provide tax, legal, accounting, or financial advice. Federal tax credits, bonus depreciation, MACRS depreciation, direct pay, transferability, domestic content bonuses, energy community bonuses, low-income community bonuses, and other incentives depend on each customer's specific facts and circumstances. Customers should consult their CPA, tax advisor, and legal counsel before relying on any tax incentive, depreciation benefit, or projected tax savings.

Don't wait for the deadline to wait for you.

Free commercial Energy Assessment. We'll review your last 12 months of utility bills, your roof or parking layout, and coordinate the begin-construction timeline with your CPA — then deliver a custom design within 1 business day.

Start the Tax-Deadline Review

Custom design + tax-stack model within 1 business day.

By submitting, you agree to be contacted by Option One Solar at the phone or email above. No spam, no third-party sharing. Privacy.

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