Congress Extends the Bonus Depreciation Incentive for Solar Projects


One of the key federal solar incentives – the 50% Bonus Depreciation benefit – was unexpectedly extended today as part of the much discussed “fiscal cliff” legislation which was passed by Congress and signed into law by President Obama.As a result, companies that place qualifying solar photovoltaic systems into service during 2013 are eligible for 50 percent bonus depreciation. This means that in the first year of service, companies can elect to depreciate 50 percent of the basis immediately while the remaining 50 percent is depreciated under the normal 5-Year MACRS schedule (despite the 30+ useful life of today’s solar PV systems).For companies with a tax bill, the combination of the 50% Bonus and the 5-Year MACRS can provide significant and predictable cash tax savings. For companies without a tax bill, or for those not interested in investing capital in non-core solar assets, the depreciation benefits can be monetized indirectly through a third-party owned solar system.To learn more about how your business can benefit from Bonus Depreciation and a host of other solar incentives, please contact PowerFlex today.