Palmer was looking for a way his business could save on taxes for the year when our solar consultant approached him about solar energy. With the 30% Federal Tax Credit and tax savings on depreciation, solar seemed to be the perfect answer.
“A lot of it made sense to me. The immediate savings as far as tax credits and then the long-term savings as far as electrical.”
The 30% Federal Tax Credit allowed Palmer to deduct 30% of the system’s cost from owed taxes. This credit is available to all solar system owners through 2019, from businesses to farms to residences, so long as they have tax liability. The incentive is poised to step back in 2020 to 26% and will decrease to 22% in 2021. By 2022, the credit will remain as a 10% tax credit for businesses only.
Dr. Palmer was also able to take care of another tax savings – 100% bonus depreciation. This incentive is available for all commercial solar systems, and allows the entire cost basis of the system to be depreciated in the year it was placed into service, allowing them to accelerate all of the depreciation benefits to the first year.