Massive Incentives!
FEDERAL TAX CREDIT
To help pay for your renewable energy system, the federal government will allow you to deduct 30% of the total project cost off your federal income tax. This is known as the Investment Tax Credit (ITC). It can be taken all at once or it can be claimed in increments over the next 5 years until the total amount of the tax credit has been reached.
GRANTS AND LOANS FOR RURAL AND AGRICULTURE BUSINESSES
Small businesses located in rural areas or agricultural producing businesses such as farms may qualify for the US Department of Agriculture’s Rural Energy for America Program (REAP) grant and loan program. These are funds specifically designated to help rural businesses pay for the cost of installing a solar panel system on their facilities and can further offset the total cost of your project. The application deadline for next year is March 31.
Eligible businesses can receive a grant of up to 40% of the total project cost and/or a loan of up to 75% of the total project cost. A combined loan and grant will cover up to 75% of the total project cost.
ACCELERATED DEPRECIATION
In addition to the federal tax credit, businesses can depreciate the cost of their solar panel system over a five-year period. This is known as the Modified Accelerated Cost Recovery System (MACRS). Assuming you take advantage of the federal income tax credit for solar, MACRS will allow you to claim most of the total project cost in depreciation on your federal taxes. Be sure to consult with a trusted tax professional for details on how this will work for your business.
