In an effort to help people embrace renewable energy, the Federal government is offering a 30% tax incentive on the full cost of installing a solar PV system through 2019, including:
The Commercial Tax Credit is calculated as 10% of the eligible system cost or $50,000, whichever is less. The Commercial Tax Credit can only be claimed by business, corporation, or LLC entities.
This incentive can be applied for at: https://oed.fluidreview.com/
Because depreciation is considered an expense, having a larger amount to depreciate during the tax year results in a smaller overall tax liability. When the commercial ITC is claimed, accelerated depreciation rules allow 85% of the tax basis to be depreciated over a 5-year period (where any unused depreciation can be carried back 2 years and forward 20 years)
BONUS DEPRECIATION CALCULATION on a $1,000,000 project: Since the business is claiming the ITC, its depreciable basis for the system is 85% of the tax basis: 0.85 ∗ $1,000,000 = $850,000. If your tax rate was 35%, then your tax benefit would be $297,500. The Bonus Depreciation allows for 50% of this total to be used in the 1st year, plus the regular depreciation of 20% of the remaining balance.
Additional Federal Grants are available in some areas that pay a 25% cash incentive on the total cost of installing solar. Contact us to see if your business is in a qualified area.
Governed by RCW 82.16.165, a Production Incentive is paid per kilowatt hour (kWh) to those who install solar based upon the size of the solar system, date of certification/installation and whether or not the solar modules are Made in WA.
|Fiscal Year Ends||Base Rate: Residential||Base Rate: Commercial||Bonus for Modules made in WA|
The Solar Investment Tax Credit ("ITC") is a federal tax credit for solar systems placed on residential (under Section 25D) and commercial (under Section 48) properties. In December 2015, Congress acted to extend the 30% tax credit through 2019 with a step down in subsequent years: to 26% in 2020, to 22% in 2021, and thereafter it is 0 (zero) for homeowners and 10% for businesses. Link to SEIA's website with a breakdown on the ITC.
Oregon Energy Trust Incentives for PGE and Pacific Power
Energy Trust offers cash incentives that reduce the upfront cost of solar installations. The incentive amount depends on the size of your system and your electric utility.
|Portland General Electric||$60,000 max||0-14 kW: $0.60/watt|
15-150 kW: $0.60-$0.30/watt*
Project size cap: 400 kW
|Pacific Power||$40,000 max||0-10 kW: $0.50/watt|
11-100 kW: $0.50-$0.20/watt**
Project size cap: 250 kW
Incentives are available on a first-come, first-served basis.
Our 2018 budget is $150,000, and we will periodically review remaining funds. Incentive levels are subject to change and may end at any time.
Update (Jan. 29): We have allocated 35 percent of the 2018 incentive budget.
|Commercial net metered||$0.50/AC output watt|