Tax Season 2020
The most underused and high value government solar rebates for businesses can reduce your clean energy costs by 65%
call 323.208.9250 to see how the government help you pay for
cleaner, cheaper, better energy
Tax season is a really good time to remember that making the switch to better energy is not just as simple as it’s ever been, your business is effectively paid handsomely to do it!
We all know that a business’s monthly electricity bill can be reduced by up to 95%, but it’s surprising how few realize the true value of the tax deductions available to fund it.
Sure, the Investment Tax Credit (ITC) has stepped down this year from 30% to 26%, and will go down further in 2021, but when taken into account alongside the other deductions available, a clean energy system can be installed with discounts up to 65%!
So much of this money is left on the shelf when tax season rolls around.
Could it be time for your business to revisit clean energy? Call us on 323.208.9250 to see how we can help.
Investment Tax Credit (ITC)
In a nutshell
The ITC is a 26% tax credit for solar systems that can be applied to both customer-sited commercial solar systems and large-scale utility solar farms.
It can be used to pay for last year’s tax bill, your current tax bill, or any tax bill for the next 20 years!
The ITC accounts for less that half of the tax deductions for solar projects. The total deductions usually add up to 65%, so you pay less than 35% of the cost of a revenue generating solar project.
Eligibility for the ITC is based on a “commence construction” standard. The IRS issued guidance in June 2018 that explains the requirements taxpayers must meet to establish that construction of a solar facility has begun for purposes of claiming the ITC:
Starting physical work of a significant nature (Physical Work Test), or
Meeting the so-called Five Percent Safe Harbor test (i.e., paying or incurring five percent or more of the total cost of the facility in the year that construction begins).
Calculating the ITC
As no local or utility rebates are deducted from the total net cost of the system, the formula for a $150,000 installation would be:
26% x $150,000 = $39,000
Plus other deductions, including MACRS and other rebates:
37% x $150,000 = $58,500
So are you interested in taking advantage of government help to pay for cheaper, cleaner, better energy?
HERE’S SENIOR PROJECT MANAGER GINO RICHTER TO EXPLAIN THE 4 SIMPLE STEPS IN JUST ONE MINUTE:
Chat to us about your better energy project in the bottom right of the page, or leave us a quick note in the contact formx below and we’ll get back to you within 24 hours.