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What Is A Solar Tax Credit?
Solar investments are an environmentally friendly renewable energy source and therefore the federal government through tax credits which include IRC 48 provide tax credits for making these investments that can total 30 - 60% of the total solar investment depending upon various project variables. ($1M of solar panels creates a $300k - $600k tax credit) The federal government knew that taxpayers making solar investment may not have sufficient tax liability to utilize all solar credits that they were entitled to and made the credits sellable under IRC 6418 to other companies with large income tax liabilities.
What are the benefits of buying solar credits?
Buying solar tax credits is a huge savings opportunity for your company. The credits have a three year carryback so that you can amend returns and see the benefit. With regards to current years tax liabilities the savings and financial impact is recognized immediately from a tax accounting standpoint for financial statements. Any credits purchased can be used on your tax return or quarterly estimated payments.
What kind of return on my investment can I expect?
Although the market price is not set and no transfers have occurred to date, many industry experts expect the credits to sell at a discount of approximately 8%. Therefore, if you have a $10M tax liability, it may be possible to eliminate that tax liability for $9.2M. (instant savings of $800K)
The Future Of Solar
40%
Of US electrical supply will be solar by 2035
1.5 Million
US Solar Jobs by 2035
22 Years
Carry Forward on US Solar Tac Credits
The long-term stability of the Commercial Clean Energy Credit will allow businesses to continue driving down costs and investing in their own growth, and by investing in solar, you will be helping create jobs and strengthen the economy, while saving yourself money in the process.
What is a Solar Marketplace?
The Purpose
Business and individuals may be able to reduce their federal and state tax burdens and while also supporting certain historic, cultural, and community-driven causes by purchasing tax credits.
Many states, as well as the federal government, provide tax credits for certain investments in historic rehabilitation projects, low-income housing, film production, and other activities that spur economic growth and innovation, expand employment, and support progressive initiatives. These credits can be purchased by taxpayers to reduce tax rates in 30+ states and through select federal programs.
Why SunBridge?
Properly selecting credits to purchase or sell, as well as overseeing the transfers, can be a complex process that consumes time and resources without guidance from professionals versed in state tax credit nuances. Matching buyers to the right sellers unable to use credits in their business is also vital to create a foundation for success.
Results
Beyond the potential to deliver a high rate of return to buyers and reduce effective tax rates, transferable tax credits can also help you:
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Reduce your total state and federal income tax liability
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Diversify your investment portfolio
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Promote renewable energy
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Achieve sustainability goals and environmental, social, and governance requirements
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Meet local Community Reinvestment Act requirements