Grants and Incentives for Solar Energy Systems Located in Wisconsin
Federal Modified Accelerated Cost Recovery System (MACRS) or Five-Year Depreciation
PV systems meeting federal eligibility requirements qualify for accelerated five-year tax depreciation instead of the normal 20-year depreciation. Going to a five-year depreciation schedule reduces a PV system's life cycle cost by approximately 12.5%. For example, the life cycle value of the depreciation allowance of a $20,000 PV system would be $5,250 rather than $3,000, saving the owner $2,250 in taxes (assuming a federal tax bracket of 34% and a discount rate of 10%).
Qualification for MACRS depreciation has the same requirements as the 10% Business Investment Tax Credit for Solar Energy Equipment.
The basis for depreciation is the total project cost less 50% of the value of any subsidized energy financing. Subsidized energy financing includes:
- Ten Percent Business Investment Tax Credit for Solar Energy Equipment
- Focus on Energy Cash Back Rewards
- Municipal Utility Solar Energy Cash Allowance
FURTHER INFORMATION:
http://www.dsireusa.org and click on Federal Incentives
http://www.eren.doe.gov/consumerinfo/refbriefs/la7.html
Use
- IRS Publication 946,
- IRS Form 4562: Depreciation and Amortization and Instructions for Form 4562, and
- Internal Revenue Code Sec. 168(e)(3)(B)(vi).
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