Albuquerque and Santa Fe Businesses Can Shine With New Tax Plan
Who knew that in a year where much of our nation’s policies seem to be slowing the growth of solar energy investments, The new 2018 Tax Plan, brings some bright perspective to commercial solar panel installation.
Congress passed the new tax plan which includes two key elements that will make commercial solar investments appealing in 2018. In a time when much of the solar panel industry is on edge because of the new 30% tariff, some investors and business owners will see the new allowances in the Federal Tax Plan as a win for solar investments.
The two provisions:
- Congress lowered the corporate tax rate
- Increased Depreciation Bonus
Tax Reduction
Businesses and commercial solar project owners can benefit by reducing their energy consumption costs and lowering their utility bills. When Albuquerque and Santa Fe corporations reduce their overhead energy costs, they are able to increase profitability. An increase in company profits leads to the company’s increased tax liability.
The Silver Lining
By investing in a renewable energy system, local companies and large corporations can benefit tremendously from the reduced tax rate, from 35 percent to 21 percent in 2018.
Bonus Depreciation
In addition to lowering the corporate tax rate, commercial solar investors will likely enjoy an increased bonus depreciation. Through the Modified Accelerated Cost Recovery System (MACRS), the asset’s value can be depreciated over five years. Prior to the new Tax bill, commercial owners were allowed to depreciate 50 percent of the asset’s value during the first year following installation.
With the new tax rules, the bonus depreciation has doubled. Customers can now depreciate 100% of the entire cost of the system in year one. By doubling the bonus depreciation, commercial solar project owners will be able to lower the profits they report on their taxes in 2018.
What should local business and corporations do right now?
With these benefits Sol Luna Solar encourages businesses and corporations to take a closer look at how a solar energy system could impact future profitability and savings. Review your corporation’s electricity usage and tax liability to see how adding a solar PV system would result in long-term profitability.
Businesses are also encouraged to take advantage of the Federal Investment Tax Credit which is still at 30 percent in 2018.
We can HELP!
Our designers at Sol Luna Solar provide FREE corporate analysis and modeling for solar energy systems. We utilize state-of-art tools to illustrate Return on Investment and long-term project value. If you have received an estimate prior to the new tax bill and want to make the most out of 2018, contact our commercial sales team for a thorough review of your location.
*Sol Luna Solar is not a certified accountant. Businesses and corporations should consult with their accountant in order to determine how the corporate tax rate decrease and bonus depreciation will impact them in 2018.
