Commercial Solar with Bonus 50% Depreciation

MACRS AKA Accelerated Depreciation for Commercial Solar
May 21st 2016

People are always asking, “What is the return on investment for solar?” The calculations for the ROI on solar projects is pretty complicated and has to take in account all sorts of things like; the cost of the total system to be installed, the energy output for your solar installation, shading, the rates you are paying from your utility, interest rates on financing, and of course tax benefits.

The tax benefits for solar installations are still around from the federal government. In late 2015, Congress decided to extend the tax credit through 2022. The current rate is still at 30% for residential and commercial property. In years to come, the tax credit percentages will start to decline, and then be phased out after 2022. Solar has already reached grid parity in many markets, and it is believed that by 2022, solar will reach grid parity for all markets and a tax credit will no longer be necessary.

Let’s hope it does!!

Businesses have an added tax incentive called Modified Accelerated Cost Recovery System (MACRS) also known as Accelerated Depreciation.   MACRS can be applied to lots of different equipment used in businesses: like vehicles, printers, medical devices, and of course solar modules are applicable for this as well. Those companies with the tax appetite can depreciate the value of the installed solar equipment, such that you could essentially write off the entire cost of the system in as little as 3 years… 3 years you say! YES, 3 years!   Since this is the topic of this blog, lets dive into the details. Read more

Solar 2016

Rectify has been off to a good start in 2016.  With the completion of ground mounts, commercial and residential roof top installs, and adding some new DIY packages for sale on our website.   We are excited for what the year will bring us.  Be on the look out for our next blog item featuring the tax benefits for commercial solar.

As a general tid bit of info, commercial solar is a very good investment for the next year or two by utilizing accelerated depreciation or MACR for those CFO’s, accountants, and money management minded individuals.  Here is a link from the folks at SEIA to give you some general information, but be on the look out for a thorough explanation from Rectify.  http://www.seia.org/policy/finance-tax/depreciation-solar-energy-property-macrs

Rectify Solar is the 2014 ISBDC EDGE Award Winner

We are humbly, thankful for the award recognition of the Indiana Small Business Development Center’s EDGE award in the Emerging Business sector.  It has been through their guidance that we have been able to see successes within our company and promote the growth and knowledge of sustainability, energy efficiency, and solar in Indiana.  http://www.isbdc.org/2014-edge-winners/ THANKS ISBDC!!

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Happy Solar Customer Jessica Reed

Solar Panels!

By Jessica Reed

After months of anticipation, the solar panels are finally lining up along the roof of the barn. We have yet to turn the system on; there’s still some wiring to be done and a few panels left.

Chicken Coop, Barn, and Solar Panels: A Dream Come True

I look at the farm journal from when we first got here, where I fantasized about one day having solar power on the barn, and I’m pinching myself that we’re realizing that dream just five years after moving in. (I’m stating the obvious when I say there are financial benefits to not having kids….) Read more

HB 1320 and how it Affects you

First of all, HB1320 does not affect Municipal or Rural CO-OPs.

Currently, we have full net metering where you get a kWh for kWh credit for your over production of energy, and the excess gets stored as credits indefinitely.  Kinda like roll over minutes which some cellular companies offer.

The bill seeks to fundamentally change  net metering for all residential customer, and only residential customers of Duke, IPL, Vectren, NIPSCO, and I&M.  I say it like that because customers with demand charges  which incur demand charges are exempt. Which means that some businesses, churches, schools and local units of government might fall under this rule as exempt as well.  To replace the net metering they are going to an avoided cost measure, which basically means that instead of a kwh for kwh credit you will only get 30c on the dollar.

Also, current systems are wired in such a way that the energy you produce actually goes into the home and powers anything which is requiring energy, this is a form of energy efficiency.  This bill will require a different wiring methods so you will have to sell all your power to the power company first, thus you will not get any of those energy efficiency benefits.  This called “buy all, sell all” and it is drastically less beneficial to you!

Currently the bill states that all installs installed before Dec 31,2014 will get grandfathered with the old net metering rule (the current one)  The bill is very confusing though because as introduced it also references May 14, 2015. However, if you add additional modules to your home, you will have to sign new interconnection agreement, thus you will no longer be grandfathered.

This is extremely bad for businesses because most people purchase a smaller system and then plan on buying more in the future.  Also, if you were to sell your home the home buyer will not get the grandfathered net metering rule.  Lastly on this topic, this removes the incentive to purchase a system as an investment for resale on the home market.  Often times, a purchased solar system will be installed at a value less than the fair market value of the system.  ie, installed for $3.25/watt, valued at $3.65/watt.  You added instant equity, and resell value to your home.  However, HB1320 if enacted, replaces and drastically reduces the kWh for kWh credit, thus the instant equity has vanished.

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Why you need to pay attention to solar energy legislation

Written by: Tim Evans, tim.evans@indystar.com

The 36 solar panels point south from their perch on the roof of Cumberland First Baptist Church. At first blush, they seem like an unlikely nod to one of the most basic Christian tenets.

“There is a holy mandate to care for the earth, which God created and called good,” The Rev. Thomas Wyatt Watkins tells me, quoting from the Old Testament creation story.

As the pastor showed me the 9-kilowatt, photovoltaic array installed in October, Watkins said the church’s plunge into the world of alternative energy is tied to a faith concept called “Creation Care,” which focuses on being good stewards of all God’s gifts.

A few miles to the west, in the heart of Indianapolis, an even larger span of 80 solar panels sits hidden atop the roof of Englewood Christian Church. It generates about 20 percent of the church’s energy, said Joe Bowling, who manages the solar project. That savings frees up money to support church outreach programs in a depressed and under-served neighborhood.

Solar panels are sprouting up alongside steeples and crosses on church rooftops across the state. At least seven Indiana faith groups have made the move to solar power, in part to shift precious dollars from utility bills to God’s work, and another seven or so are in the process of adding systems.

But legislation now pending at the Statehouse has Watkins and Bowling concerned that other churches, as well as individual homeowners (they both have solar at home, too), will lose that opportunity. The legislation proposed by Rep. Eric Koch, R-Bedford, is backed by Indiana’s 14 investor-owned electric and gas utilities and opposed by environmentalists, some manufacturers of solar products, consumer advocates and the state’s growing faith-based “Creation Care” movement. Read more

Amazon to power cloud with wind farm in Indiana

Following Amazon’s quiet commitment to use 100 percent clean energy for its AWS cloud, on Tuesday Amazon announced that it will support the construction and operation of a wind farm in Benton County, Indiana, which will provide power for its data centers. While Google, Facebook, and Apple have been investing in clean power for data centers for awhile, Amazon has moved more slowly and been more quiet when it comes to how it planned to incorporate clean power into its energy infrastructure mix.

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Is Net Metering an Endangered Species in Indiana?

Watch out, Hoosiers.  HB1320 has been initiated contact your legislature today.

In several states across the country, we have seen monopoly utility resistance to transiting our energy infrastructure from fossil-fuels to cleaner alternatives.  There is a significant amount of outside money invested in the multi-state effort to eliminate net metering in order to maintain the status quo.  Now the resistance movement has reached Indiana.  Net Metering in Indiana is in danger of vanishing.

What exactly IS “net metering?”

Through the policy called “net metering,” rooftop solar owners receive fair credit for the excess electricity that they feed into the power grid during the day, when solar panels generate power at peak demand times. This power goes to neighboring homes and businesses — power that the utility sells to those neighbors and businesses at the going retail rate.

Now utilities want to profit off of the solar power that rooftop solar owners provide. We hear that legislation is planned to restrict Indiana’s net metering program, which was established in 2011 during the Daniels Administration. What will the bills say?  We don’t know for certain, but here is what we do know:  Opponents of rooftop solar express concern about cost shifting, but these are the facts about rooftop solar and its benefits:

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Solar farm coming to Kokomo

It’s an idea that the city of Kokomo has flirted with for seven years, and now it’s happening. Inovateus Solar LLC of South Bend has entered an agreement with Duke Energy to produce solar power in the city, and it will use the former Continental Steel site to do it.

“We are excited,” said Mayor Greg Goodnight. “It generates a little bit of revenue for the city, but they take on the responsibility of the area being covered and helps us save a little money on upkeep.

“We’ve had other people show interest in doing this over the years, but this seemed like the best fit. Everything is good environmentally. There are some places on the property where they will be limited on what they can do, but others that will allow a more liberal reuse.”

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