Under Section 168 of the Internal Revenue Code, solar energy systems qualify for bonus depreciation, which permits an immediate deduction of up to 100 percent of the cost in the year placed in service. Solar photovoltaic (PV) panels deliver a host of financial and environmental benefits to businesses looking to reduce energy spending and shrink their carbon footprint. However, the efficiency, value, and performance of PV panels all decline with age. This clarification addresses longstanding ambiguities in how businesses calculate and claim deductions under the Modified Accelerated Cost Recovery System, or MACRS. There is a decline in the value of a property over time due to depreciation, wear, technological progress. The Modified Accelerated Cost Recovery System (MACRS), established in 1986, is a method of depreciation in which a business' investments in certain tangible property are recovered, for tax purposes, over a specified time period through annual deductions. Built for commercial solar owners, EPCs, and sales professionals. Additionally, it serves as a means to help consumers control their upfront installation expenses.
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