Commercial solar EPC since 2014

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Money

Incentives, and the warning that goes with them

Incentives move the economics of a commercial system substantially. They also change with legislation, guidance and programme budgets, which is why every figure here is marked as a sample and why we will not give tax advice.

Federal credit
Sample 30 percent
Depreciation
Sample five-year MACRS
Storage
SGIP, budget stepped
Status
Not tax advice
Reviewing project documentation

Read this before any number on this page

This is a demonstration website. Every incentive percentage, dollar figure and eligibility statement below is illustrative and may not reflect current law or programme status. Incentive rules change, adders have detailed qualification tests, and programme funds are allocated in tranches that close. SunHarvest does not provide tax or legal advice. Consult a licensed tax professional about your own entity and position before making any decision based on an incentive.

What exists

Six programmes that change commercial solar economics

Federal investment tax credit

Sample: 30 percent of eligible basis

A credit against federal income tax based on the eligible cost basis of the system, for commercial taxpayers. Meeting prevailing wage and apprenticeship requirements has been the condition for the higher base rate on projects above a size threshold, which is one reason we run prevailing wage as standard on qualifying work.

Rates, conditions and adders change with legislation. Confirm current terms with a tax professional.

Domestic content adder

Sample: an additional 10 percentage points

An additional credit percentage where the steel, iron and manufactured products in the system meet domestic content thresholds. It affects procurement decisions, because qualifying modules and racking must be specified before purchase, not discovered afterwards.

Eligibility depends on detailed content calculations. We document the supply chain for any project pursuing it.

Accelerated depreciation (MACRS)

Sample: five-year MACRS on a reduced basis

Commercial solar property has historically been depreciable over a five-year schedule, with bonus depreciation available in varying amounts by year. The depreciable basis is generally reduced by half the credit claimed. For a taxpaying entity this is frequently worth as much as the credit itself in present value terms.

Depreciation treatment is specific to your entity and tax position. This is not tax advice.

Self-Generation Incentive Program

Sample: incentive expressed in dollars per kWh of storage capacity

California's SGIP has provided incentives for behind-the-meter energy storage, with rates varying by category, customer type and budget step. Storage paired with solar has been a common qualifying configuration, and the programme has offered higher rates for certain categories.

Budget steps and eligibility change frequently and funds are allocated in tranches. Check current availability before relying on it.

Property tax exclusion

Sample: new construction exclusion on the solar portion

California has provided an exclusion from property tax reassessment for the value added by an active solar energy system, so installing an array has not increased the assessed value of the property under the exclusion.

The exclusion has had a statutory sunset that has been extended in the past. Confirm current status.

Utility and make-ready programmes

Sample: utility funds the service and make-ready infrastructure

California utilities have run make-ready programmes covering some or all of the infrastructure costs for fleet and public EV charging, particularly for school buses and disadvantaged community sites. These are application-based with their own timelines.

Programme availability, funding and eligibility vary by utility and year.

Worked example

How the stack works on a sample project

A 600 kW DC rooftop system at a sample installed cost of $2.15 per watt. Every figure below is illustrative and the depreciation benefit assumes a taxpaying entity with liability to offset.

Sample stack. Your entity, your tax position and current law all change this.
Array rating600 kW DC
Gross installed cost$1,290,000
Federal investment tax credit at 30 percent-$387,000
Depreciable basis (gross less half the credit)$1,096,500
Depreciation benefit, present value at a sample 21 percent-$230,265
Net cost after incentives$672,735
Modelled year one production952,560 kWh
Year one energy value at $0.187 per kWh$178,129

Note what this example does not include: demand charge savings, which depend on storage and on the shape of your peak, and any state or utility programme. Both are modelled separately in your assessment.

Answers

Incentives: questions

Not covered here? Our engineers answer directly, not through a call centre.

Ask a question(661) 555-0183

No figure on this page should be treated as current. This is a demonstration website and every percentage, rate and amount is a sample. Incentive law changes with legislation, guidance and programme budgets, sometimes several times a year. Confirm everything with a licensed tax professional before you rely on it.

Generally not directly. That is the whole reason third-party ownership structures exist: a taxable owner claims the benefit and passes value back through a lower rate per kilowatt hour. Recent law has also created elective payment routes for certain entities, which is exactly the kind of thing to check with a professional.

An additional credit percentage where the steel, iron and manufactured products in the system meet defined domestic content thresholds. It affects procurement, because qualifying equipment has to be specified before purchase and the supply chain documented.

Because the higher credit rate has been conditioned on prevailing wage and apprenticeship requirements for projects above a size threshold, and because most of our public work requires it anyway. Building two labour models would risk the credit on the projects that need it.

California's Self-Generation Incentive Program has offered incentives for behind-the-meter storage, allocated in budget steps with eligibility varying by category and customer type. Funds are finite and steps close, so timing matters. We check current availability during the assessment rather than assuming it.

We will show you the stack with every assumption exposed

Incentives are the most misrepresented part of a solar proposal. Ours come with the conditions attached and a recommendation to check them independently.

CSLB #1071482 (sample). Prevailing wage on public works. Engineers answer, not a call centre.

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