Recouping Costs With Tax Incentives

 As we move through the early stages of bringing Plug ‘N Save Energy Products to the public we are constantly looking for ways to inform and help our customer base. Recently, I have been researching the Federal solar tax incentives. As I waded through page-upon-page of legal print and attempted to dig my way to the heart of the solar tax credits, I was struck by the effort at every level of government to make renewable energy a realistic option for all types of consumers.

It is nice to see that the Federal Government is taking action to address the public’s concerns about the cost of installing new renewable energy systems. The following is my attempt to relay this information in a concise manner and, hopefully, it will act as a good guide (or at least a starting point) for recouping some of the installation and operation costs of renewable energy systems.

Those hoping to “go green” in 2011 will be pleased with many of the government solar funding solutions. First, the Residential Renewable Energy Tax Credit of 30% (originally established by the Energy Policy Act of 2005) on residential solar electric systems and solar water heaters will remain in effect through December of 2016. This tax credit for solar systems was initially capped at $2,000, but because of action taken in The American Recovery and Reinvestment Act of 2009 the cap was removed. The 30% credit includes the cost of equipment and labor, and can be carried over to future tax years if the entire credit cannot be redeemed all at once.

Second, businesses will also be able to benefit from the federal government’s drive to expand renewable energy resources. A federal cash grant of 30% will be available in lieu of the tax credit to ensure that businesses are able to receive funding for solar solutions, even if they do not possess the tax liability to qualify for the full amount. This provides companies with the resources needed to become more sustainable at a quicker pace, something the government hopes will stimulate success in the future.

Finally, businesses will be able to receive up to 100% of the depreciation benefit of their solar energy system due to the extension of the bonus depreciation through 2012. Depreciation benefit plans will typically pay off over a period of five years; however, the extension allows businesses that install solar energy systems in 2011 to qualify for 100% of the bonus depreciation in the first year and up to 50% for those systems installed in 2012. Systems installed in 2012 would then receive the rest of their benefits over the next five years.  These benefits allow companies to create and implement renewable energy goals quickly, instead of only being able to make long-term plans due to cost.

One of the most promising pieces of all is the fact that state and local incentives are, in most cases, able to piggy-back on the federal credits. Although this provides even more savings, it also drastically complicates the tax credit process and makes finding which incentives one qualifies for difficult. The sea of information can be confusing and I know firsthand that it can discourage many from exploring their options. That is why we are introducing our new free service, Tax Incentive Research Assistance.

Our Tax Incentive Research Assistance service will allow you to learn what is needed to take full advantage of the funding provided by your federal, state, and local governments without having to spend hours hunting and searching. All you need to do is send a Research Request to research@pnsenergy.com and include your name and zip code. We will do all of the research for you and send you links to all the documents and forms you will need – no charge.  Plug ‘N Save Energy Products wants to make going solar easy for everyone, so send us your Research Requests and we will help you get started!

Additional resources:

http://www.dsireusa.org/

http://www.ncsl.org/

— Colin J.

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Filed under Environment, Solar, Sustainable Businiess, Tax Incentives

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