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   Rebates & Incentives

Federal Tax Incentive -- On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act, and through it he also signed into effect the Residential Renewable Energy Tax Credit and the Business Energy Investment Tax Credit. The Residential Renewable Energy Tax Credit is described as a personal tax credit, whereas the Business Energy Investment Tax Credit is identified as a corporate tax credit. Both are quite different, specifically with regards to the way one accounts for utility rebates.

Utility Rebates -- In addition to the Federal Tax credit, utility companies in most states offer rebates and this is treated as a purchase price reduction. This means that the value of the rebate is subtracted from the total purchase price, resulting in a net adjusted cost for the purpose of determining the value of the federal tax credit.

Depreciation -- The third major financial incentive is depreciation, which is only for businesses. Solar projects qualify for a 5-year accelerated depreciation. The depreciation of these systems can be 50% the first year and 12.5% in each of the succeeding 4 years.