What Ohio Businesses Need to Know About Solar Tax Credits

Energy costs are becoming a growing concern for businesses across Ohio, and many companies are starting to look more seriously at long-term ways to control utility expenses.

In this episode of Chamber Amplified from the Findlay-Hancock County Chamber of Commerce, Doug Jenkins talks with Terry Nielsen of Superior Energy Solutions about rising electric rates, solar energy systems, battery storage technology, and the looming deadline for key federal solar tax incentives.

They discuss:

•  Why utility costs are increasing across Ohio  
•  Commercial solar ROI and tax credits 
•  Battery storage and peak demand reduction 
•  Energy efficiency opportunities for businesses 
•  What companies need to know before July incentive changes 

Whether you’re actively considering solar or simply trying to better understand where energy costs are heading, this episode offers practical insight for business owners, manufacturers, and facility managers.

Music and sound effects obtained from https://www.zapsplat.com

Transcript

Welcome Back And What Changed

Doug Jenkins 0:04

Hello, everyone, and welcome to Chamber Amplified, brought to you by the Finlay Hancock County Chamber of Commerce. I'm your host, Doug Jenkins. Each week here on the podcast, we're talking about the things that matter the most to local businesses and organizations: everything from workforce and leadership development to marketing, IT issues, and just the everyday realities of running something that serves our community. So we're back after somewhat of an unexpected week off. Truth be told, I planned on having an episode out for you after Memorial Day. The problem is I got that mutant cold that everybody's had here recently, and my voice went away the day I was supposed to record. So that didn't happen. And as you can maybe tell, I'm still kind of dealing with that right now. I feel like I'm talking out of my nose. Anyway, we're back, and uh a whole new series of podcast interviews coming your way as we get those scheduled. Uh, also, this came together at the perfect time because as I was dealing with being sick and getting other things done, I didn't really have a guest. Thankfully, Terry Nielsen at Superior Energy Solutions reached out to me and said, I have something very timely that I need to get out there. And I said, let's do it. So we're going to talk about that today.

Why Energy Costs Keep Rising

Doug Jenkins 1:14

Energy costs, that's what we're talking about. Those are obviously becoming one of the biggest operational headaches for businesses. You, as a business owner, you probably want to focus on things like workforce, your materials interest rates. Those are all things that you budget for, but as those energy costs go up, that creates more and more headaches. Obviously, we know some of the reasons why the energy landscape is changing. A lot of the focus is on data centers. Certainly that has something to do with it, but just overall manufacturing growth has put a strain on the system. There's increasing grid demand and capacity charge increases, and that all feeds into increased energy costs. So we're going to talk about what solar can do for you and an important deadline coming up. And it's not about, hey, let's look how cool I am for having a solar energy. That's not what we're talking about. Maybe when renewables first got started, that was the selling point on it, but that's not what we're talking about today. We're talking about predictability when it comes to what you're paying for your energy costs, controlling those long-term costs, and operational stability. So even if you aren't interested in solar, this is a good episode on just understanding where energy costs are heading and what's driving that. Uh, and there's again a major tax and set of deadline coming up at the end of June that you need to be aware of now, not six months from now. You don't want to miss out on the opportunity to at least have the discussion. And Terry's gonna explain all of the uh practical things that you need to get done between now and the end of June to make sure that you are in line for this subsidy. So, again, if you enjoy the podcast, don't forget to leave us a rating and review on whatever podcast player that you listen to us on. Make sure to share with others as well. We're on YouTube now, so if you really want to share the message, you can make it easy. Just drop that link into your Facebook feed, and that's a good way to spread the word. Now, let's get into it.

The Solar Tax Credit Deadline

Doug Jenkins 3:04

So Terry reached out to me at the exact right time as uh in preparing the podcast. I realized I didn't have a guest for today's episode. Terry had a very timely piece of information he needed to get out. And just like chocolate and peanut butter, here we are, Terry, uh, as there's some uh some big news coming down the pipeline your way.

Terry Nielsen 3:24

Yeah, big thing, uh big thing coming down the pike is you know, we do solar systems here at Sphere Energy Solutions, and um one of the big ways that uh companies make this affordable are the uh tax incentives or the ITC tax credit. And one of the things that the big beautiful bill did last year was it eliminated those uh starting in July of this year. So if a company is interested in going solar um and they want to do it the most affordable way possible, they need to get uh what they call safe harbored, which is uh get started with a project with us, get uh get a contract signed, and then we actually have with that safe harbor four years to get the uh system installed. So don't have to get it all paid for today. Just gotta get uh get started and make a deposit so that we can get you in the queue and uh save that tax credit money for you.

Doug Jenkins 4:16

The bottom line is there's about a month to get ready for it. Uh and I know sometimes when people talk about solar, they think, oh, I just want to pat myself on the back for the green energy. But the more that we've talked to people over the years, it's transitioned from that to this is a really good way to offset higher energy costs, uh, especially

Capacity Charges And Real Rate Hikes

Doug Jenkins 4:35

now as everybody's paying more and more. What have you seen in that regard over the last year where we've seen such high energy rate increases?

Terry Nielsen 4:45

Well, everybody, everybody on AEP has taken two increases. Um they had their auction last year and they increased the uh capacity charge for everybody, and that's different depending on how much electricity you're using. And then this year we had a slight bump as well for distribution charge. That was actually an AEP increase. The first one is a kind of a PJM generate, you know, uh capacity thing. Um so everybody's power is gonna go up as you continue to see these uh data centers and other manufacturing coming into Ohio because of our cheap electric prices, cheap, you know, kind of compared to other places in this in the country, um, you're gonna continue to see those prices continue to continue to rise. Um, you know, and with solar, what you're getting is you're kind of pre-paying your energy. So yeah, the solar um system might cost you a good bit of money. I mean, we've put systems in that are over a million dollars, um, but over the life of that system and you've got warranties that take these systems out 25, 30 years of operation, you know, you're gonna be paying something like three to four cents uh kilowatt hour for the average price for the next 30 years, and you know exactly what that price is gonna be because you've already paid for it. Um, you know, if you're on a uh AEP uh system or Toledo, you're typically, if you're a large manufacturer, you're gonna be in the eight to nine cent range, and you're saying, man, I'm really buying well, and you are compared to residential rates. Um, you know, residential rates can be anywhere between 13 cents up to 22 cents, depending on what deal you have and who you're on with, but none of those compared to the three cent rate you can get if you buy

Residential Versus Commercial Incentives

Terry Nielsen 6:28

solar.

Doug Jenkins 6:28

Now, do these subsidies that are available do those also apply to residential right now too, or is it strictly uh on the commercial industrial side?

Terry Nielsen 6:37

Well, the the residential is available only if you have what they call third-party ownership, which would be a lease of a system or a PPA contract, which is a purchase agreement where you're purchasing the power the system makes. The company that owns the system, they get the tax break. And in these situations, they'll pass that tax break on to you by a reduced cost on the front end. So if you're getting your it's like leasing a car, you lease a solar system, they're getting that 30% tax credit, they're probably passing on 20% of it on to you. You're leasing the system to five or six years, and at the end of the six years, you're paying you know 10% of the cost you would have paid, you know, originally. But the big the big hitters right now are really commercial because if you're in Lima, you know, you can get up to 50% of a tax credit, and that's a tax credit that goes right back to you, and that's before depreciation. So we have customers that have signed up, you know, they get a 30% standard uh ITC, they get a 10% bonus for being in a in an economically disadvantaged area or in a coal closure area, and then we get them some domestic content and get them another 10%. So now they have a say a million dollars to make the math easy for a system, they're getting $50,000 back the next tax year for tax credits that they can use, and then they get to take depreciation on top of that. So it's not unusual for a commercial system to get 65-70% of the system offset just with taxes, and all of that except for the depreciation, goes away in July.

Efficiency First Then Aggregation

Doug Jenkins 8:16

What have the conversations with area business owners and companies been like over the last year as they start to look at what they're having to deal with from an energy standpoint?

Terry Nielsen 8:27

People are getting a lot a lot more interested in it. You know, for a long time, capacity in in Ohio hasn't went up, so we've we've been blessed with pretty stable prices. And now that we've had the shock of a of a capacity increase and seeing where things are going and seeing seeing data centers in particular get built, um, you know, businesses are really starting to look at it. Not just stuff for us, they're looking at, you know, we do LED light, so we have customers coming to us for LED light efficiency, which can help you 25-30%, you know, reduce your costs depending on what your business is. And then they look at, you know, uh buying from an aggregator, whether they're they sign up for a contract for two to five years, and the chamber has an awesome energy program that'll come in, audit you, um, audit your business for little to no charge. They'll recommend some things, they'll get you on an aggregate. Once you've done all those things and you still want to save more money, then it's time to look at solar because solar is the only thing that's going to get you down to those really low numbers that are possible.

Doug Jenkins 9:27

I like the idea. I like it for my own house, but I think it's a great idea for businesses too. Just I want to have more control over the entirety of the process and not be at the way it just gives uh gives you stability. Uh, you're probably a little bit more tuned in to just how much electricity you're using, I think, when you have a solar system or something to that degree. I don't know. I look at uh the people who have like their uh I'll say Tesla, but I don't know, people can see their little dashboards, and I love searchboards. I look at that, I'm like, oh, that would be cool. I want that. Uh that's kind of the reason I want it, but it just feels like you're a little bit more locked in on just what you were consuming energy-wise when you're a little bit more invested in that too.

Monitoring Demand And Peak Shaving

Terry Nielsen 10:11

Sure, and you know, these systems they have they have controls and they have monitoring where you can actually look at a system anytime, any day, go back through the life of the C system and say, what is that panel five? What did it produce at two o'clock on the 14th? It'll tell you. And it can really clue you into efficiencies and and what your demand is doing. You know, for businesses, it's not just we're replacing that system. You know, maybe you're a huge business user and you can't, we can't build a big enough solar field on your land to get you 100% offset. But what it can do is it can reduce your demand. We can throw in some batteries and taper off that demand. And, you know, uh as the um as the energy program at the uh guys that work with you guys will tell you, you know, you shave a little bit of demand off those peaks, it could save you a hundred, a couple hundred thousand dollars in a year just by changing your capacity charge.

Doug Jenkins 11:01

And we'll put some information about the uh the chamber energy program in the show

Batteries Change The Math

Doug Jenkins 11:05

notes too. Uh CEA, I believe, uh is who does that. You mentioned the batteries, and I wanted to talk about that because uh a lot of times I think probably one of the reservations you hear is like, hey, if it's cloudy out, I'm not actually doing anything. But over the last 10 years, those batteries have changed the game quite a bit. I know just from the home side of things, you get a wall battery, you charge that up during the day, and then run your house off of that overnight. And that that helps offset some of those peak demand hours. I might not have stated that right, but maybe you can state that better for me. Sure.

Terry Nielsen 11:40

Yeah, so with batteries, you can do it for your house, you can do it for a business. Uh, some businesses do very large bus uh batteries. I know of three million dollar battery systems they get put in. And what they can do is they can store energy and help you shave your peak demand. In California and I think in Ohio and a few locations, you can actually use that, the grid can actually use that battery feed back to the grid, and they'll pay you a lot of money to be able to pull your battery down to help feed the grid so they don't have to start a coal plant as an example. If you have enough people with those batteries, big businesses, that they when they get their peak demand on July 20th, because it's 100 degrees out, it says starting up another plant. If they could just pull those batteries down for those two hours of AC time, um they write you a pretty good size check. And then also with like uh Hancock Wood, I think it is, um you have a system where on just residential electric, you're paying something like six cents during the night, you're paying 15 cents during the day. You could put in a small residential battery that charges at night, you pull it off, pull off of it during the day, and now you're paying six cents instead of that 14 cents for your power. Um, that's a great way to get a battery system and pay for it and save you a lot of money. And on the residential side, you still get your 30% on batteries, so the battery portion doesn't go away. Um, it's a great way to stable out your power bill that way. And with businesses, like we said, we're shaving peak to band and we're also with or without solar, it can offer some cost

Data Centers And Grid Volatility

Terry Nielsen 13:16

savings.

Doug Jenkins 13:16

It's interesting, and this is me spitballing an idea that I have and I talk to people about, and uh, I'll talk to you about it too. But it seems like that would be a great way to stabilize the energy grid, is if you had more people on solar and with the battery, uh, you're just not asking those plants to do as much during the summer when it's it's so hot out. Uh sure. You know, it's not necessarily that you're gonna be completely self-sufficient, but the grid could be a whole lot more stable, and that's better for all of us.

Terry Nielsen 13:45

Right. And one of the one of the big problems you're running into with the data centers, you know, they're not, you know, I use I use AI, everybody uses AI in some form or fashion. It's gotta it's gotta happen. But one of the problem challenges you have with the grid is once a data center gets installed and they turn that sucker on and it goes through its learning phase, um, it can pull more power than the city of Finlay. And then once it's done with its learning phase, it it comes back down and uses maybe half the power that it used. And then it'll cycle in and out. And now you've got these um generators. You know, how do they deal with those peaks? They've got to deal with it. You don't want your power going out, so that's why you have more capacity charges because they have to have standby energy to be able to turn that on so that when those peaks hit, they can handle it. The nice thing about solar is it's at your house, you're the one making money off of it, not some big company. You know, we only install solar on the property where the power is going to be used. Um, so the guy that buys the solar, he's the one that pockets the money. And it helps offset the grid

How To Get Safe Harbored

Terry Nielsen 14:48

completely.

Doug Jenkins 14:48

So the bottom line is if you are a business looking at this, you need to start looking at it a little bit quicker if you want to save money on the project and keep it uh affordable or at least more affordable. Uh, Terry, again, walk us through that process. Let's say I've got my widget factory. Uh I want to start saving some money on that. What do I need to be doing right now?

Terry Nielsen 15:11

Well, it's a real simple process. It all starts with your electric bill. You you'll get with us, you'll send us your electric bill, we'll uh we'll do an analysis on it, figure out what you got going on, where you might be able to put solar at. We'll talk to you a little bit about LED lights if you don't have them, all of that. And once we've analyzed that, we'll put you together a quick proposal. It's just a couple of pages, kind of tells you what the price of it's gonna be, what your return on investment's gonna be. And then if you say, well, you know, this makes sense, I'm gonna make a good amount of money. You know, typically you're gonna in the 12 to 25% return rate on these things, and then we'll put together a proposal for you, a formal long proposal that has production guarantees and all of those things in it that you can commit to, and then we take a small deposit. Once we have the deposit, now we got four years. We got a nice runway to take our time. You'll get that same tax credit just like you started it up this year. Um, so it's a very simple process. We don't take a whole lot of your time, we don't believe in wasting people's times. We'll just put something in front of you. You say you like it, we'll move forward. If not, great to talk to you. Call us when your electric goes up and you're ready to talk to us.

Doug Jenkins 16:21

I think it's definitely worth the conversation. I think all business owners are looking at all the ways they can save on their bottom line, and uh sometimes that's gonna require a little bit of an investment, but it's gonna make sense

Best Ways To Contact Terry

Doug Jenkins 16:32

over the long term. Uh, Terry, if people want to have that conversation with you, what's the best way to get in touch with you?

Terry Nielsen 16:37

Well, you can reach out to us over here at Superior Energy or Solutions websites www.senergys.com. Uh you can email me at Terry at SNergs.com, or you can give me a shout on my cell phone, 419-905-5923. It's a quick uh quick process, locks in your energy, and you're gonna get some savings.

Doug Jenkins 17:01

All right, Terry, we appreciate thank you for reaching out with this topic. This is uh exactly something that's on a lot of people's minds right now, and I needed a guest, so we knocked out a couple of things, worked out. Appreciate your time today, Terry. All right, thanks, Doug.

Final Takeaways And Chamber Support

Doug Jenkins 17:16

So a few thoughts as we wrap things up on this week's edition of the podcast. Those rising energy costs, they're not temporary. It's something that we're gonna be dealing with for a while, so it's best to prepare for them. And businesses that think strategically about utilities now are going to be in a better position later. So even if solar isn't the right fit, it's really good to understand what your energy usage is, what the demand charges look like, the efficiency opportunities that you do have, and aggregation programs that are available to you. By the way, we have something like that available through the chamber for Chamber of Commerce members if you're interested in doing something like that and locking in better rates. Definitely want you to take a look at that, but also just the urgency of this. If you want access to the current tax incentives and the subsidies that are available, you need to move quickly and get that done before July gets here. At a minimum, it's worth the conversation. Thanks again to Terry for jumping on on short notice and uh really saving the podcast schedule and uh had some timely information as well. Always good to have, and glad to mostly have my voice back, kind of. Again, thanks for listening to Chamber Amplified. That'll do it for another edition of the podcast. This is a free service available to the community made possible by the investment of our members here at the Findlay Hancock County Chamber of Commerce. If you're looking at ways to get your business involved in the community, a lot of times the chamber is the best place to start. And if you'd like to learn more about that, just send me an email, d Jenkins at Findlay Hancock Chamber.com, and we can talk about how an investment in the chamber not only helps your business, but the business community as a whole. Thanks again for listening, and we'll see you next time on Chamber Amplified from the Findlay Hancock County Chamber of Commerce.