Federal Commercial Incentives

1. REAP Program

Through the REAP program, rural small businesses and agricultural producers are eligible for grants, loans, or a combination of both. For more information, see the REAP website or contact us.

2. Tax Credit

• 30% tax credit for the purchase and installation of solar electric (photovoltaic, or “PV”) system
• 30% tax credit for purchase and installation of domestic solar hot water (thermal) system (note: solar pool heating does not qualify for this credit)
• 30% tax credit for purchase and installation of wind power system
• 30% tax credit for purchase and installation of geothermal heat pumps

Please note: WSW can not offer tax advice. Please consult your tax advisor for more information on how incentives apply to you.

Credits are taken for each system separately, so it is possible to qualify for several credits. These credits reduce tax liability. They are not reductions to income. If tax liability in the installation year is less than the credit, the difference can be carried over to succeeding years’ tax liability.

A grant in lieu of the tax credit is possible for systems placed in service in 2010. Extensive Federal paperwork required. See www.treas.gov/recovery/1603.shtml

PV and solar water heating systems are 5-year properties for the purpose of depreciation. This applies to systems installed through 2010. Further, under a special rule in the Internal Revenue Code, the depreciation basis for PV and solar hot water systems is only reduced by half of the federal tax credit. A business that installs a solar thermal or PV system (or both) gets a tax credit of 30% and can also depreciate 85% of the cost of the system(s) over only 5 years. Small businesses are eligible for even faster depreciation.