TAX LIABILITY

The Energy Policy Act of 2005 expanded the federal tax credit available for solar PV systems on commercial properties. This credit is currently available through the end of 2008. There are several bills in Congress that would extend this credit in to the future, and new information on the outcome of those bills will be posted on our website as it becomes available.

For commercial entities, the amount of this tax credit is 30% of the total retail cost of the system. This credit, taken together with the Xcel rebate, brings your final cost down dramatically. However, you must pay income tax on the utility rebate in order to use the full retail price as your tax basis. If you only have a small tax liability or would be subject to the Alternative Minimum Tax by applying this credit, the credit can be carried back one year and forward for 20 years.

The Solar Energy Industries Association (SEIA) has created a Guide to Federal Tax Incentives for Solar Energy that explains all the details of this program. We encourage you to share this guide with your tax consultant to confirm your eligibility.