Business Energy Tax Credits & Solar Energy Grants
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The benefits of combining the U.S. Clean Energy Investment Tax Credit (30%) with accelerated depreciation cannot be overstated. Since commercial solar can be depreciated at this rate (on a 5-year MACRS schedule), and depending on the cost of your utility-supplied electric, you could see a payback period of under 6 years, with double-digit annual ROI.
You can download a copy of the most recent IRS Publication 946 by clicking here. Due to the use of the mid-year or mid-quarter convention (whichever is applicable), depreciation expenses for 5-year property will be reportable in years 1 through 6, beginning in the year the property is placed into service. Below is the typical 5-year scale for your reference:
| Tax Year | % to Depreciate |
| 1 | 20.00% |
| 2 | 32.00% |
| 3 | 19.20% |
| 4 | 11.52% |
| 5 | 11.52% |
| 6 | 5.76% |
How Solar Depreciation Works
- 85% of total solar installation costs are eligible for accelerated depreciation.
- If you are running a profitable business and can clearly show that the solar power you are generating is for business use then it can have a strong impact on the bottom line.
- In addition if you have passive income from other investments, the value of this depreciation can be very strong as well.
Corporate Tax Credits
- Federal Business Energy Investment Tax Credit (ITC)
- Federal Renewable Electricity Production Tax Credit (PTC)
- Guide to the federal tax credit
Federal Loan Programs
- U.S. Department of Energy - Loan Guarantee Program
- USDA - Rural Energy for America Program (REAP) Loan Guarantees