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Economic Subsidies for Solar Power

Economic Subsidies for Solar Power
There are two subsidies that together can reduce the cost of a commercial solar power system by 70-75% of the original installed price.

1. Federal Investment Tax Credit for Commercial Solar Energy Property

Businesses investing in solar energy equipment and its installation can take 30% of the total project costs (including supporting structures and new roofing installed in conjunction with PV systems). For more information, see IRS Publication 946, IRS Form 4562: Depreciation and Amortization, and Instructions for Form 4562.

Alternatively, the 2009 American Recovery and Reinvestment Act provides for a Renewable Energy Grant, administered by the US Department of Treasury, equal to the 30% Investment Tax Credit. There is an online application process, and applications are currently being accepted. (Sunlight Electric completes these applications on our customers’ behalf.) See the program web site for more information, including answers to frequently asked questions.

Grants are available to customers purchasing solar power systems placed in service before the end of 2010 or after 2010 if construction begins on the property during 2009 or 2010 and the property is placed in service by Jan 1, 2017.

Year

Depreciation %

1

20.0%

2

32.0%

3

19.2%

4

11.5%

5

11.5%

6

5.8%

Total

100%

2. MACRS Accelerated Depreciation

Investment in solar power generating equipment and its installation are subject to 5-year accelerated depreciation under the IRS' Modified Accelerated Cost Recovery System. Inexplicably, though solar power equipment is considered a 5-year asset, fully depreciating it takes six years.

Now that you know about these subsidies, click here to learn about other ways Sunlight Electric can make solar power affordable for your business.

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30% Federal Tax Credit
5-Year Depreciation



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