Solar Tax Credit 6-Year Projection

Federal State
 Investment $ 100,000.0 Tax rate 35.00% 8.25%
 Production 45 kWh/h 16425 kWh/year
Year1 Year2 Year3 Year4 Year5 Year6 Totals
Initial investment $ 100,000.0 $ 100,000.0
Credit available Federal $ (30,000.0) $ (30,000.0)
NC State $ (7,000.0) $ (7,000.0) $ (7,000.0) $ (7,000.0) $ (7,000.0) $ 0.00 $ (35,000.0)
Depreciation ($ 17,000.0) ($ 27,200.0) ($ 16,320.0) ($ 9,792.00) ($ 9,792.00) ($ 4,896.00) $ (85,000.0)
Less tax effect $ 9,647.50 $ 15,463.50 $ 9,261.60 $ 5,556.96 $ 5,556.96 $ 2,778.48 $ 48,237.50
Income – sale of electricity $ (3,285.0) $ (3,285.0) $ (3,285.0) $ (3,285.0) $ (3,285.0) $ (3,285.0) $ (19,710.0)
Less tax effect
on sale
$ 1,149.75 $ 1,149.75 $ 1,149.75 $ 1,149.75 $ 1,149.75 $ 1,149.75 $ 6,898.50
Increase in rent to cover $ (600.0) $ (600.0) $ (600.0) $ (600.0) $ (600.0) $ (600.0) $ (3,600.0)
Less tax effect $ 210.00 $ 210.00 $ 210.00 $ 210.00 $ 210.00 $ 210.00 $ 1,260.00
Net outlay/(income) $ 53,122.25 $ (21,289.25) $ (16,583.65) $ (13,760.29) $ (13,760.29)
$ (4,642.77)
Cumulative outlay/(income) $ 53,122.25 $ 53,122.25 $ 53,122.25 $ 53,122.25 $ (13,760.29) $ (13,760.29) $ (16,914.0)

 

Facts

 North Carolina state credit maximum is $2.5 million per project. Credit cannot be higher than 50% of tax liability in any year.sunward
• Depreciation basis must be adjusted down by 50% of the available credits.sunward
• Assume net income sufficient to take full available credit each tax year.sunward
• Tax effect assumed at 35%, but can be changed at top of sheet.sunward
• Rent increase of 3% of total investment spread over six years.