SOLAR FINANCIAL INCENTIVES
FITC - Residential
The Federal Residential Renewable Energy Tax Credit allows taxpayers to claim a credit of 26% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.
Solar Property Tax Exemption
In Wisconsin, any value added by a synthetic gas energy system, solar-energy system, or a wind-energy system is exempt from general property taxes. The property tax exemption applies regardless of whether the equipment is deemed real property or personal property.
A solar-energy system is defined as “equipment which directly converts and then transfers or stores solar energy into usable forms of thermal or electrical energy, but does not include equipment or components that would be present as part of a conventional energy system or a system that operates without mechanical means.” Passive solar design elements do not qualify under these rules.
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Business Energy Investment Tax Credit (ITC) - 26%
Businesses that install solar photovoltaic (PV) systems are eligible to receive an (ITC) investment tax credit, which can be used to directly offset federal tax liability on a dollar-for-dollar basis. If the tax credit exceeds your tax liability you can roll the credit into future tax periods for 20 years. Commercial projects that commence construction through the end of 2022 are eligible to receive a 26% tax credit of the total PV system cost. The ITC steps down thereafter: 2023 projects qualify for a 22% ITC, 2024 and later projects qualify for a 10% ITC.
Federal - 100% bonus depreciation (Tax Reform Bill)
The Tax Reform Bill modifies bonus depreciation under Code Section 168(k) to allow 100% expensing for property placed in service after September 27, 2017 and before January 1, 2023. By increasing bonus depreciation to 100 percent, the new tax bill essentially allows eligible entities to deduct the entire allowable tax basis of the system in the first year of operation. Under the federal Modified Cost Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. MACRS establishes a lifespan for various types of property over which the property may be depreciated. For PV systems, the taxable basis of the equipment must be reduced by 50% of any federal tax credits associated with the system.
(FOE) Business Customer PV Incentive 2021
Focus On Energy Business Customer PV Incentive up to 500+ kW (DC) or $50,000 Cap for the installation of Solar Electric (PV). Up to 5 kW is $200 per kW with max incentive $1000. 5 kW to 10 kW is $1000 + $150 per kW above 5 kW with max incentive $1750. 10 kW to 100 kW is $1750 + $125 per kW above 10 kW with max incentive $13000. 100 kW to 300 kW is $13000 + $100 per kW above 100 kW with max incentive $33000. 300 to 500 kW is $33000 + $85 per kW above 300 kW with max incentive $50000. This incentive is available to commercial properties (e.g. any property outside of a 1-3 unit home), and applies also to municipalities, non profits, and/or any entity on a commercial utility rate structure.