Commercial incentives [RE-wrenches]

Randy Sadewic randy at positiveenergysolar.com
Fri Mar 21 15:31:56 PDT 2008


Darryl,
The depreciation generates a tax deduction that reduces income tax which
is a cash benefit. So in my example, assuming a tax rate of 25%, the
business taxpayer (individual or corporation) generates an income
tax/cash savings of $1.91 per watt. 

Does that help?
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: Darryl Thayer [mailto:daryl_solar at yahoo.com] 
Sent: Friday, March 21, 2008 3:23 PM
To: RE-wrenches at topica.com
Subject: RE: Commercial incentives [RE-wrenches]


HI Randy
I was able to follow except for the deprecation part. 
What cash benefit does the deprecation accrue?
Darryl 
--- Randy Sadewic <randy at positiveenergysolar.com>
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
> 
> 
> - - - -
> Hosted by Home Power magazine
> 
> To send a message: RE-wrenches at topica.com
> 
> Archive of previous messages:
> http://lists.topica.com/lists/RE-wrenches/read
> 
> List rules & how to change your email address:
> www.mrsharkey.com/wrenches/etiquette.php
> 
> Check out participant bios:
> www.mrsharkey.com/wrenches/
> 
> Moderator: michael.welch at homepower.com
> 
> 
> 
> No virus found in this incoming message.
> Checked by AVG. 
> Version: 7.5.519 / Virus Database: 269.21.7/1335 -
> Release Date:
> 3/19/2008
> 9:54 AM
>  
> 
> No virus found in this outgoing message.
> Checked by AVG. 
> Version: 7.5.519 / Virus Database: 269.21.7/1335 -
> Release Date:
> 3/19/2008
> 9:54 AM
>  
> 
> 
> - - - -
> Hosted by Home Power magazine
> 
> To send a message: RE-wrenches at topica.com
> 
> Archive of previous messages:
> http://lists.topica.com/lists/RE-wrenches/read
> 
> List rules & how to change your email address:
> www.mrsharkey.com/wrenches/etiquette.php
> 
> Check out participant bios:
> www.mrsharkey.com/wrenches/
> 
> Moderator: michael.welch at homepower.com
> 
> 
> - - - -
> Hosted by Home Power magazine
> 
> To send a message: RE-wrenches at topica.com
> 
> Archive of previous messages:
> http://lists.topica.com/lists/RE-wrenches/read
> 
> List rules & how to change your email address:
> www.mrsharkey.com/wrenches/etiquette.php
> 
> Check out participant bios:
> www.mrsharkey.com/wrenches/
> 
> Moderator: michael.welch at homepower.com
>
> 
> 
> 
> 
> 
=== message truncated ===



 
________________________________________________________________________
____________
Never miss a thing.  Make Yahoo your home page. 
http://www.yahoo.com/r/hs


- - - -
Hosted by Home Power magazine

To send a message: RE-wrenches at topica.com

Archive of previous messages:
http://lists.topica.com/lists/RE-wrenches/read

List rules & how to change your email address:
www.mrsharkey.com/wrenches/etiquette.php

Check out participant bios: www.mrsharkey.com/wrenches/

Moderator: michael.welch at homepower.com


- - - -
Hosted by Home Power magazine

To send a message: RE-wrenches at topica.com

Archive of previous messages: http://lists.topica.com/lists/RE-wrenches/read

List rules & how to change your email address: www.mrsharkey.com/wrenches/etiquette.php

Check out participant bios: www.mrsharkey.com/wrenches/

Moderator: michael.welch at homepower.com
--^----------------------------------------------------------------
This email was sent to: michael.welch at re-wrenches.org

EASY UNSUBSCRIBE click here: http://topica.com/u/?bz8Qcs.bz9JC9.bWljaGFl
Or send an email to: RE-wrenches-unsubscribe at topica.com

For Topica's complete suite of email marketing solutions visit:
http://www.topica.com/?p=TEXFOOTER
--^----------------------------------------------------------------






More information about the RE-wrenches mailing list