Both federal & state governments are encouraging the
use of alternative & renewable energy sources

Luckily for us, both federal and state governments are encouraging the use of alternative and renewable energy sources.  They offer a wide range of financial incentives to businesses investing solar, wind, and other sustainable energy projects.  These incentives are drastically improving the cost effectiveness of these projects by lowering upfront costs and reducing a company’s tax burden.

The federal government is offering a 30% corporate investment tax credit (ITC)

It has no cap and is determined by the total installation cost.  If your business doesn’t have an appetite for the tax credit then you may choose to receive the 30% in the form of a grant from the National Treasury.

Another major federal program is the Modified Accelerated Cost-Recovery System (MACRS), which allows companies to recover their investments in solar energy systems (and other renewable energy technologies) through an accelerated depreciation schedule. The program allows for a 5-year schedule for most types of solar, including solar photovoltaics (PV).  In addition, 2008 and 2009’s federal stimulus legislation includes an additional, one-time 50% bonus depreciation for systems installed in 2009 and 2010. Looking from a tax perspective, MACRS can facilitate the financing of a solar energy system. Many state governments also extend tax credits to businesses. Others, including California, provide rebates to help reduce upfront costs.

Information on individual state's programs can be found at www.dsireusa.org.