While we do our best to make solar affordable, no one wants to pay more than necessary. Typically, the only incentive available to solar customers in Colorado is the 30% federal tax credit, with a few small exceptions. But we recently met with a company that has studied the tax laws and found another huge incentive for homeowners - depreciation.
If you're involved in business finance you know that businesses claim depreciation on their taxes, which is a way for the government to compensate for physical goods having less value over time. This wasn't an option for homeowners though. So how is it an option with solar?
There are four requirements from the IRS to claim depreciation.
1. You must own the property where the panels are located.
2. You must be responsible for maintenance expenses on the system
3. You must own or lease the solar equipment. This means you will not have access to this incentive if you are on a PPA (power purchase agreement).
4. The equipment is used in a trade, business, or income producing activity.
Number 4 is the key. When you are on the grid, you are receiving credit for the power you produce, and you are likely receiving compensation for your excess production at the end of the year. Therefore, the requirements for depreciation are met. If you are skeptical, the IRS specifically address this point in a letter. https://www.irs.gov/pub/irs-wd/1035003.pdf
We have partnered with a company that is the expert in maximizing your solar incentives, meaning you'll save thousands more than you would otherwise. They fill out the forms for you and back their work so if you are audited they will stand up for you.
Why pay more? Contact us for a quote today.
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