Average Number of Sun Hours: 4.64
At this geographic location, in order to generate 10,000 kW of electricity per year, you would need a 8 kW photovoltaic system installed.
Using a typical photovoltaic installed cost of $4.00/Watt (this cost can vary depending on many variables specific to your site), the total installed cost of this system should be approximately $32,000.00.
Federal Residential Renewable Energy Tax Credit $9,600.00
.01 Section 25D provides a tax credit to individuals for residential energy efficient property.
Section 1122 of Division B of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, amended section 25D for taxable years beginning after December 31, 2008.
The amount of a taxpayer’s section 25D credit for a taxable year beginning after December 31, 2008, is equal to the 30 percent of the qualified solar electric property expenditures made by the taxpayer during the taxable year.
The tax credit for this system is likely to be $9,600.00
Business Energy Investment Tax Credit (ITC) $9,600.00
The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.
Tax credit for this system is likely to be $9,600.00
Modified Accelerated Cost-Recovery System (MACRS) $1,600.00
The MACRS allows a corporation to depreciate the cost of the solar panels and associated equipment and installation in five years.
The depreciated cost per year of this system is $6,400.00. Assuming a tax rate of 25%, the savings would be $1,600.00.
How many years to pay off the photovoltaic system?