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GAIA Host Collective
I've been looking at the Mall and Warehouse rooftops around here thinking about exactly this plan. I'm glad it's started!
As a landlord, I've looked into Solar Hot Water, and hope to get it soon, but have been wondering about a tax implication. In Maine, we do have a rebate program for SDHW, but if I was installing a system for our one, and the two additional apartments, wouldn't I also be eligible for a 66% business expense deduction or amortization on the equipment? A tax preparer was sceptical, but how could this not be a valid business expense?
Bob
Does a big tax writeoff in the form of a 5 or 10 year (??) amortized property count on top of the standard (In this case, Maine) State and Federal rebates, incentives?
Otherwise, it's a lot rougher to get moving on a $10-30K investment.
Anybody out there know the tax ins/outs about this?
Bob
and Accelerated Depreciation
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Residential Solar Electric Systems:
Federal Income Tax Credit - 30% of the Total Installed System Cost. ($2000.00 cap)
California Energy Rebate is currently $2.60 per watt. Jan 1, 2007 the Ca Solar Initiative takes effect, giving the PUC control over all rebates with a starting rate of $2.50 per watt. This will be funded by all utility users and will be reduced about 10% each year until 2017.
CEC and PUC Rebates are considered taxable income by the IRS but not by California.
Newly constructed active solar systems are exempt from California Property Taxes.
Solar water heating, except for pools and spas, is eligible for a separate 30% Federal Tax Credit. ($2000.00 cap)
Download the Seia Tax Manual for more information.
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Commercial Photovoltaic Systems:
Federal Investment Tax Credit - 30% of the Total Installed System Cost. (CEC and PUC rebates are considered taxable income by the IRS but not by California)
California Energy Commission Rebate is currently $2.60 per rated watt for systems up to 30kW. For larger systems the PUC rebate is now $2.50 per watt.
Accelerated 5 year Depreciation on the Total Cost of the System less 1/2 of the Tax Credit.( or 85% of the System Cost)
Newly constructed active solar systems are exempt from California Property Taxes.
Download the Seia Tax Manual for more information. We strongly suggest you contact a tax professional to minimize your net system costs.
http://www.zapsucker.com/taxtips.htm
That makes sense to me. I hope it makes sense to my accountant, who thought it was too much to ask to get depreciation on anything that had already gotten a Tax Credit. But I keep thinking 'It is a business expense, right?' (or 2/3 of it, in our case) It just seems that with alt energy, you get into a mentality that says 'this is different from other kinds of expenses, and doesn't count.'
So that means a $13k (estimate we got for sdhw, 3apt) installation is getting an immediate tax credit of $3,900 , (leaving $9,100 ) and over 5yrs, 85%, or $11,050 x 2/3 = $7,359 gets amortised/depreciated. Of course, there's a Maine SDHW rebate that comes off the front end, too, and I have to see if these can all work with each other.
I draw mice and build camera gear.. this stuff is a little alien to me.
Bob