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Solar industry tax incentives defined by IRS

On Behalf of | Jun 27, 2018 | Income Taxes

Georgia investors who are involved in solar energy development can benefit from a guidance published by the Internal Revenue Service. It said that developers who invest at least 5 percent of the complete cost of a utility-level solar project can receive a 30 percent investment tax credit. This policy applies to all investors until the end of 2019.

The investment tax credit for solar energy was created in 2015, but it did not define a specific framework for qualification as a project beginning construction. In the guidance, the agency specifies that developers can begin their project over a four-year period in order to qualify for the tax credit. So long as the project breaks ground or the 5 percent investment before 2020, developers can take until 2023 to fully activate their solar initiative and still benefit under the tax law. Depending on the dates that the project will be under construction and go into service, the tax credit has a sliding scale of 30 percent to 10 percent.

In addition, the IRS also outlined specifics for other tax credits for renewable energy investors, including fuel cell plants, geothermal pumps and wind projects. Solar energy industry spokespeople hailed the guidance, saying that it helps to support development of the solar supply chain and that investors can benefit greatly from planning with the relevant tax knowledge. This guidance can help the solar industry to offset concerns about solar tariffs created by the Trump administration in an effort to spur greater domestic production of solar energy products.

There are a number of incentives that private and institutional investors can avail themselves of in order to receive the maximum tax benefit. A tax lawyer can help individuals and businesses dealing with complex tax questions to resolve their concerns.