This tax benefit was created to provide an incentive for businesses to pursue renewable energy sources. This tax credit is currently equal to 26% of the gross project cost, less utility interconnection upgrades. This will phase down to 22% on January 1, 2023, and finally to 10% over the years to follow. Effective utilization of available incentive programs can dramatically reduce the upfront cost of solar while providing a predictable long-term revenue stream.
New depreciation laws for renewable energy projects allow businesses to write off 100% of the eligible cost of solar PV systems in the first year or spread out over six years. Normally a system with 25+ year lifespan would be depreciated slowly over 25 years. The Bonus part of this benefit is that you are allowed to depreciate 85% of your project rather than the typical 70%. This extra bonus is unique to renewable projects.
Many businesses are able to pass these tax benefits through to their personal taxes depending on how the company is structured. We recommend you discuss this option with your tax accountant.
C-PACE (Commercial Property Assessed Clean Energy) is a unique financing option that allows business owners in Connecticut and other New England states to access up to 100% financing for green energy upgrades and pay for them over time.
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