Commercial incentives [RE-wrenches]

[Davis Terrell]

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Wrenches and Randy,

While we are sharing good info on this subject, I will add my question 
regarding the Federal tax credit.  Whenever I see mention of this tax 
credit, it seems to refer to corporate taxes.  Does this mean that a 
business must be a corporation to qualify for these credits?  Or can any 
type of business qualify?  Thanks.

Davis Terrell
Bright Earth Solar
(802) 492-2273 / brightearthsolar.com



Randy Sadewic wrote:
> Hi Travis,
> I seriously doubt that it is 5 or even 8 years to get your money back
> with no local incentives and 6 cents for net metering. If he is a
> convenience store magnate with a high tax rate then it helps.
>
> On $9 per watt you get a 30% tax credit so subtract $2.70. The
> depreciation benefit you can only estimate. The depreciable basis of the
> asset is reduced by 1/2 of the credit which gives you a basis of $7.65
> (9-(2.7/2)) times the the individual or business federal tax rate.
> Assume the tax rate is 25% so the tax benefit is $1.91 (7.65 times 25%).
> That leaves $4.39 ($9-$2.7-$1.91) or 50% of the cost to recover through
> net metering at 6 cents.
>
> As for how accelerated depreciation works, I do not know the exact
> number to use each year but it isnt critical to figuring a return unless
> the payback is less than 5 years.  I usually assume an even amount of
> tax benefit each year. According to the new federal law, you can deduct
> 50% in the first year and the remainder over 4 years. There is also
> Section 179 of the IRS Code, which may be available for businesses if
> the total investment is about $100,000 or less. In this case, you are
> allowed to write-off 100% in the first year. I haven't seen any position
> on Section 179 but I did my own research and concluded it was eligible.
>
> Hope that helps.
> Randy
>
> Randy Sadewic
> randy at positiveenergysolar.com
> NABCEP Certified PV Installer
> Positive Energy, Inc.
> Phone 505 424-1112
> Fax     505 424-1113
>  
> Enjoy the Sun!
>  
>
> -----Original Message-----
> From: Travis Creswell [mailto:tcreswell at ozarkenergyservices.com] 
> Sent: Friday, March 21, 2008 6:20 AM
> To: RE-wrenches at topica.com
> Subject: RE: Commercial incentives [RE-wrenches]
>
>
> On the commercial tax credit thread can someone give or direct me to an
> example of how it applies along with the 5yr accelerated depreciation.
>
> I recently had a chance conversation with a convenience store where they
> told me they were going to do a solar PV system because they had figured
> on
> a 5 year payback.  I was pretty shocked by that statement because here
> in
> Missouri we have no incentives other then the federal and our commercial
> electricity prices are normally under .06/kWh.  I explained to him that
> in
> MO each $8k-$10k of a PV system of would produce about $10/month worth
> of
> electricity.  (And that's assuming .10/kWH residential electricity).  He
> replied that "maybe it was 8yrs".
>
> I assumed they were grossly misinterpreting the application of the 5 yr
> accelerated depreciation but if they aren't then I'd like to know.
>
> The reply might need to be moved to the marketing list.
>
> Thanks,
> Travis Creswell
> Ozark Energy Services
>
> -----Original Message-----
> From: Daryl DeJoy [mailto:penobscotsolar at midmaine.com] 
> Sent: Friday, March 21, 2008 8:01 AM
> To: RE-wrenches at topica.com
> Subject: Commercial incentives [RE-wrenches]
>
>
> Hi all,
>    I am confused. Is the 30% tax credit for commercial installations
> still
> available to customers? If so, until when?
> Thanks in advance,
> Daryl
>
>
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