Commercial Solar Blog

Your source for the latest news in the solar industry.

All Posts

Your Business, Tax Depreciation, And A World Of Free Energy

In the last couple of years, hundreds of thousands of people in the US have made the switch to solar energy under this understanding: the sun’s energy is free to anyone that owns a solar system. But what if there was a way to get the free energy the sun gives and a free solar system? Through the current tax depreciation schedule we have come to understand at Addy Solar, there is a way! Here’s how.

While it will cost you the full investment up front, the MACRS Depreciation Schedule will allow you to recover 85% of your businesses investment into solar.

What Is MACRS?

MACRS stands for Modified Accelerated Cost Recovery System, and is a method of depreciation that helps a business recover on big investments. This happens through annual tax deductions, and these deductions bring about recovery on the money the company spent on big purchases. In this way, the businesses can make the investments they need to take the company in the right direction. With financial incentives such as the depreciation schedule for a solar system, businesses are subsidized to bring about a much needed change in the energy conversation–a renewable one.

download our free guide to financial incentives

The Solar Investment Broken Down

Let’s say a solar system costs $100,000. After the 30% tax credit and the 50% cut on the tax credit, 85% of your system is now depreciable. Spread out over the 5-year depreciation that the MACRS provides we find these numbers:

Solar System Cost: $100,000

ITC Tax Credit 30%: $30,000

Depreciation 85%: $85,000 (over 5 years)

1st year: $51,000

2nd year: $8,500

3rd year: $8,500

4th year: $8,500

5th year: $8,500

For a grand total of $85,000 dollars. Yes, this means that every year your business would receive what is listed in tax deductions, amassing to the original number paid for the solar system. Not only are these tax breaks refilling the initial hit you took to by the system, you’re also paying next to nothing for energy by owning the system itself. If the company is able to swing the initial price of the investment, they are able to get deductions year by year and by the end of year 5, essentially have received back what they paid on the system.


Final Thoughts

By writing off the remaining costs with this very attractive tax depreciation schedule, a company can set themselves up for decades of free energy. Solar systems are coming with 25 year warranties, and promising to perform long after the warranty is over. Set your business up for free energy and for a system that pays itself back. Take the money you've spending on energy you'll never own, and put it towards what really matters:the business. 

Addy Electric is not a certified tax professional and recommends that you seek out your tax pro for all inquiries involving the depreciation of a commercial system.

New Call-to-action

Addy Solar & Electric
Addy Solar & Electric
Addy Solar & Electric was started by Danny Addy, an electrician with 14 years of industry experience. Since 2012, we've installed hundreds of solar systems across Northern California.

Related Posts

Solar Qualifications for your Local Business

Do you know if your businesses' roof is ready for solar energy? In this blog, we’ll create a checklist fo...
Addy Solar & Electric Oct 26, 2018 11:47:26 AM

Redding Local Business Soaks up Savings with Solar

This week, Addy Solar interviewed Don Frazer from the Shell Station. Don is a Redding native, and he owns...
Addy Solar & Electric Oct 19, 2018 3:01:44 PM

The Interview with Danny Addy & The Limited Time 30% Tax Credit

This summer, we did an interview with Danny Addy, owner of Addy Solar. We discussed the workings of the s...
Addy Solar & Electric Oct 5, 2018 12:48:09 PM