Solar Deadlines – August 10, 2026

The question of whether or not to go solar at a commercial property is a little more complicated than it was just a few years ago

Federal tax-credit deadlines, expanding building-performance requirements and rising electricity costs all are reshaping how commercial real estate owners evaluate and structure solar projects. That’s according to a new report from Hopkinton, MA-based Solect Energy, which develops solar and energy storage projects for commercial and public-sector clients in the Northeast. 

At the federal level, the 30% Investment Tax Credit (ITC) remains available for qualifying projects and accelerated bonus depreciation continues to provide significant tax benefits available for new projects, Solect says. But there’s a catch: Under current federal law, solar projects that begin construction now must be placed in service by Dec. 31, 2027, to remain eligible for the federal investment tax credit.  

“That timeline remains workable for contracts in 2026, but leaves little room for delays to complete development, installation and commissioning new project purchases,” the report states. “Owners and developers who evaluate properties now will have more flexibility and time to compare ownership and financing structures, coordinate solar with capital improvement plans or roof replacement projects, and align the project installation schedule at the chosen properties. While the fundamentals of solar look good with and without the ITC, projects that monetize 30% of the project cost will have superior financial returns.

Nor are federal deadlines the only one to consider. “State and local building codes, emissions reduction targets, and corporate sustainability commitments are creating new performance standards and financial obligations for commercial building owners,” the report states. Although many policies include transition periods, owners must begin planning and implementing improvements early enough to meet increasingly stringent requirements. 

In Solect’s home state of Massachusetts, policies such as BERDO (Building Emissions Reductionand Disclosure Ordinance) in Boston, BEUDO (Building Energy Use Disclosure Ordinance) in Cambridge, and LBER (Large Building Energy Reporting) are “encouraging owners to reduce emissions and improve building performance,” Solect says. However, this encouragement often takes a punitive approach rather than an incentives-based one. 

“For many owners, these policies have moved beyond reporting requirements and now include real fees for non-compliance,” the report states. “Buildings in Boston that exceed their BERDO emissions limits face Alternative Compliance Payments of $234 per metric ton of CO₂e plus $1,000 per day for every day of non-compliance.” 

Accordingly, said Matt Shortsleeve, SVP of policy & marketing at Solect, “Commercial property owners are navigating the convergence of federal incentive deadlines and state and local building-performance policies, and it’s affecting our customers in Massachusetts, Rhode Island and New York. Owners are evaluating properties for new solar installations now to capture 30% or 40% of project costs before federal tax credits expire. These planning meetings provide our customers clarity and more flexibility to planfully align solar investments with compliance strategies, capital plans, and long-term energy cost containment strategies across the portfolio.” 

The report describes the options available to commercial property owners in terms of financing and ownership of solar installations. Direct ownership may entail behind-the-meter onsite generation, front-of-the-meter storage or transmission to the grid, or allocation of credits to other properties in the owner’s portfolio. Alternatively, the operator may lease a rooftop from the owner, maintaining the installation and paying rent.

“Building owners now must consider not only whether a property is suitable for solar, but also how quickly a project can be developed, and whether direct ownership, a lease structure or a combination of approaches will deliver the greatest long-term value for each property and at the portfolio level.” No single approach is right for all properties, according to Solect.

In short, it’s not a decision that can be made on the spur of the moment. However, with the clock ticking on ITC deadlines, it’s also not an election to be made at leisure.