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Solar & battery

Solar Depreciation Calculator

Depreciation schedule on a commercial solar asset, and what the deductions are worth.

Your numbers

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Basis is usually reduced by half the credit.
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Result

First-year deduction $79,560
Depreciable basis $153,000
First-year tax saving $21,481
Total tax saving $41,310
Remaining to depreciate $73,440
Depreciable basis is $153,000 after the credit adjustment. The first-year deduction of $79,560 is worth $21,481 in tax, and the full schedule is worth $41,310 over its life.

This is a simplified illustration of how accelerated depreciation on commercial solar generally works, using straight-line for the remaining basis rather than actual MACRS percentages, which are not evenly spread. Bonus depreciation rates, basis adjustment rules and recovery periods all change with legislation and none of this applies to a residential system. It is not tax advice: the numbers that matter depend on your entity, your basis and your liability, and belong with your accountant.

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Questions

About this calculator

Does this apply to my home system?

No. Depreciation is for business property. A residential system is not depreciable, though a home office or a rental property may change that, which is exactly the kind of question an accountant should answer.

Why is the basis reduced?

Because claiming an investment credit generally requires reducing the depreciable basis by half the credit, so the same money is not recovered twice. The specific rule depends on the credit claimed.

The formula

basis = cost less half the credit claimed; first year = bonus depreciation plus the first regular year

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