GOVERNMENT INCENTIVES
Government incentives come and go. Remember Cash-For Clunkers? Just a few years ago there were also huge incentives on a vast array of other energy efficient products from electric vehicles to windows and doors, to air conditioning and furnaces, to insulation and more. Those too have now all expired or been reduced to almost nothing. The same is true for solar and battery storage systems. At one time the California state utility rebate would have paid property owners as much as $2.50 per watt when they installed a solar system. Today, with the exception of a few sparsely located municipally owned utility companies, that money is all gone, leaving only the federal Intangible Tax Credit (ITC) for residential and commercial solar and battery storage, and the Modified Accelerated Cost Recovery System (MACRS) for commercial only.
The ITC is better known as the 30% Federal Tax Credit. The ITC is a dollar for dollar offset of taxes owed, which for most qualified property owners equates to thousands of dollars in savings. For example, a $25,000 investment in a solar and battery storage system results in a federal tax credit and savings of up to $7,500 in hard tax dollars, effectively reducing the cost of the system down to $17,500. However, this program, like all other government incentives, will not be around forever. Therefore, we encourage property owners to act expediently to take advantage of this valuable incentive while they still can.
The Modified Accelerated Cost Recovery System (MACRS) is a method of depreciation in which a business’ investments in certain tangible property are recovered, for tax purposes, over a specified time period through annual deductions. Qualifying solar and battery storage equipment is eligible for a cost recovery period of five years. This accelerated depreciation schedule can have a significant positive impact in a business’ ROI from their solar and battery storage project.
The information presented on this page is general in nature and is not intended to be viewed as “tax advice”. Each property owner’s tax situation is unique. Therefore, we recommend that all property owners consult with their tax advisors with respect to any tax questions or advice regarding their solar project.
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180 Solar Power is a local family owned company that services residential, commercial, non-profit and government customers throughout southern California. 180 Solar Power is a licensed C-10 electrical and C-46 solar contractor.......Learn More