Solar is rapidly growing as an energy source when compared to other renewable energy sources such as wind and hydropower. Secondly, solar offers a renewable, clean, limitless, and safe energy source. You as a business owner are looking for ways to reduce operating costs while improving your cash flow. ES Solar is a leader among commercial solar energy companies. We will help you design a solar energy system with a backup battery that supplements your electricity needs and one that fully covers your operations
Utah's income tax credit for renewable energy systems includes provisions for both residential and commercial applications. The Utah Office of Energy Development administers the tax credit and is responsible for revising the tax credit rules and certifying systems as eligible for the credit. The credit is worth 10% of the reasonable installed costs. The tax credit is structured as a refundable credit. The commercial tax credit is capped at $50,000.
The Inflation Reduction Act (IRA) of 2022 establishes and extends the federal Investment Tax Credit (ITC) for solar photovoltaic (PV) systems at a rate of 30% of the total PV system cost. The 30% ITC was extended until 2032. Unlike tax deductions, this tax credit can be used to directly offset your tax liability dollar for dollar. The IRA extended the carryback period to 3 years, and the carryforward period to 22 years, in cases where the tax credit exceeds a customer's tax liability in the 'placed-in-service' year. For PV projects greater than 1 MW AC in size, the IRA established prevailing wage and apprenticeship requirements in order to qualify for the full 30% "increased rate" rather than a "base rate" which would only qualify for a 6% ITC. Projects with an output of less than 1 megawatt qualify for the "increased rate" irrespective of if prevailing wage or apprenticeship requirements are met.
Under the federal Modified Cost Recovery System (MACRS), businesses may recover investments in certain properties through depreciation deductions. MACRS establishes a lifespan for various types of property over which the property may be depreciated. For PV systems, the taxable basis of the equipment must be reduced by 50% of any federal tax credits associated with the system.
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*We are not tax professionals, please consult yours for a full breakdown of how this will affect your taxes and finances
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