50% Bonus Depreciation Extended For 2013
Don't miss the opportunity to take advantage of expiring depreciation allowances.
In addition to state incentives and the federal energy Investment Tax Credit, which allows purchasers of commercial solar to take a tax credit equal to 30% of the cost of the system, those who purchase and install such systems have the ability to utilize renewed 50% first-year bonus depreciation allowances expiring Dec. 31, 2013.
This opportunity, made possible by the enactment of the American Taxpayer Relief Act of 2012, allows solar owners to depreciate an additional 50% off the depreciable basis of a system in the first year (rather than depreciating the cost of the system over a typical five-year MACRS schedule).
This can be a significant benefit with a material impact on the financial return for commercial solar customers. However, these allowances only apply to commercial installations placed in service on or before December 31, 2013. That means the clock is ticking and time may be running out to maximize your financial return by combining these federal tax benefits and state/utility incentives.
Given the time value of money, solar system owners will realize a rate of return increase by maximizing depreciation in the first year (the more a company can expense, the less paid in taxes for that year). Several small businesses have also elected to use Section 179 expensing (also extended and enhanced by the American Taxpayer Relief Act of 2012) to write off their solar investments, reduce their income taxes, and enjoy the benefits of a long term energy saving asset. Consult REC Solar or your tax adviser to learn how you can take advantage of these programs.
With solar prices at historic lows, rising utility electricity costs, and a suite of federal, state, and local benefits available, there has never been a better time to invest in solar for your business. REC Solar’s sales, finance, and construction teams stand ready to craft a solar solution for your business that results in material savings from Day 1, and generates a healthy financial return.