Reducing Your Company's Tax Burden in 2019
A solar power system is a major investment for any business or building owner, but it is an investment that delivers significant ROI. A solar system would pay for itself without incentives, but fortunately, there are lucrative programs that dramatically reduce the time that it takes for a solar power system to be cash flow positive. These incentives include a 30% federal tax credit and accelerated tax depreciation.
Any purchase of solar power system before December 31, 2019 results in a 30 percent federal tax credit making The Investment Tax Credit (ITC) the most important financial incentive for potential solar energy customers, and one of the most lucrative tax incentives across all categories.
The Investment Tax Credit (ITC) is based upon the amount of investment in solar property. It is a dollar for dollar reduction in income taxes for those claiming the credit. Home owners are also eligible to apply the credit to their personal income taxes.
The federal tax credit isn’t the only incentive available to businesses. The Modified Accelerated Cost Recovery System (MACRS) allows businesses to deduct the depreciable basis of property over five years reducing tax liability and rapidly increasing the rate of return on solar investments. Businesses that utilize both the ITC and MACRS save an average of 60% of the overall cost of their solar power system through tax benefits.
The MACRS system is designed to allow businesses to recover capital costs over the property’s lifetime. The Tax Cuts and Jobs Act in 2017 includes additional incentives including an increase in the Year 1 bonus depreciation from 50 percent to 100 percent.
*Please discuss with your business’s accountant or personal accountant to confirm that your business qualifies for the MACRS system, to identify your business’s tax rates, and to fully understand your tax liability.
In 2018, North Carolina Utilities Commision with Duke Energy Progress and Duke Energy Carolinas launch Solar Rebate Program.
The Solar Rebate Program is helping accelerate the clean energy economy in North Carolina by providing a rebate on power produced by solar power producers. This has helped make going solar more affordable in North Carolina and will continue to influence the solar industry.
The solar rebate is divided per customer type: Residential, Commercial/Industrial, and Non-Profit. The rebate rate is different for each class and also contains a cap of revenue per customer. The rebate amount is based on watts produced by each customer.
The rate classes and rebate amounts/caps are as follows:
- Residential: 60 cents per watt, up to $6,000.
- Commercial/Industrial: 50 cents per watt, up to $50,000.
- Non-Profit: 75 cents per watt, up to $75,000.
The Solar Rebate Program is a first come, first serve basis. Our solar representatives can help walk you through and handle the application process for the solar rebate program. You can also find out more information about the rebate program on the Duke Energy Website here.