Tax Incentives add to savings opportunities.
There are two significant tax incentives available for business and property owners who install solar power systems on their facilities. In fact, you can receive up to a 50% discount on the total system cost. Be sure to consider the following incentives, which are offered for any commercial solar system placed in service in the U.S., when developing your corporate tax strategy.
Business Energy Investment Tax Credit (ITC)
Businesses that install solar photovoltaic (PV) systems are eligible to receive an Investment Tax Credit (ITC), which can be used to directly offset federal tax liability on a dollar-for-dollar basis. If the tax credit exceeds your tax liability, you can roll the credit into future tax periods for 20 years. Commercial projects that commence construction through the end of 2023 are eligible to receive a 26% tax credit of the total PV system cost.
Under the federal Modified Cost Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. MACRS establishes a lifespan for various types of property over which the property may be depreciated. Through this incentive, 100% of the depreciation deduction will be captured in the first year of operation.