frequently asked questions
Who is actually using the solar?
The lessee, or the end consumer is typically a homeowner who signs a 25-30 year lease on the solar equipment. The solar replaces their monthly power bill, and their monthly lease payment is typically 20% less than their old utility bill. This is by far one of the most efficient ways for people to get solar installed on their homes.
How do I make money in this program?
Simply put, the tax benefits, or tax savings, is greater than the money you put in. In essence, for every dollar you put in, you get about $1.50 in value. Plus, you get monthly cash flow payments for 5 years.
How do the tax credits work?
The federal tax credit is 30% of the total system system price and is a dollar for dollar credit on your taxes.
The state tax credit is 10% of the total system price, and is refundable, meaning it works just like a rebate. It is classified as commercial, because it is owned by an LLC and is used for commercial purposes.
How is the depreciation calculated?
System cost – 15% x applicable tax bracket .37% = actual tax savings
85% of the total purchase price can be fully depreciated (half of the Fed tax credit is not eligible for tax basis) most of that available the first year, depending on bonus depreciation and section 179 limitations.
Your tax professional can help you figure this one out for your situation.
Can I get a refund on taxes I paid last year?
Yes! If your tax credits exceed the tax liability for the current year, you can roll back those credits 3 years, and forward for 20 years. Your tax professional can help you figure the best strategy for rolling back credits.
Can I still do this if I don't live in Utah?
Yes! The state tax credit is refundable, so it works just like a rebate. If you don’t live in Utah, all you have to do is file a Utah return, and the state will send you a check.
How do you guys make money?
We get this question a lot. The short answer is we make most of our money on the lease and loan payments over the long term, as well as some profit from the initial down payment.
What happens if the homeowner stops paying on the lease?
Even though the default rate is less than 3%, We have measures in place to ensure the lessee stays current on their payments.
1- We are equipped to decommission the system remotely if it becomes 90 days late, thus leaving them with a power bill that is more expensive than their lease payment.
2- We have a UCC filing on their home, so they can’t sell their house without transferring the lease agreement or paying the lease off.
3- We will send them to 3rd party collections if all else fails.
Are there any deadlines for making my purchases? Can I do this in December?
Each project typically takes 6-8 weeks to complete permits and installation. The system must be installed and in service in the year it is being claimed in order to qualify for all of the incentives in that calendar year. We suggest having your projects secured by October to meet these deadlines.
What is the minimum dollar amount I can participate with?
Most of my income is capital gains, will it work for that?
Yes! This strategy works to offset all forms of income tax. Depreciation is the main variable for each tax bracket, and you’ll want to consult your tax professional for those specifics.
How do I get started?
1-set up a consultation
2- set up a conference call with your CPA
3-set up an LLC, sign paperwork, and wire funds
Disclaimer: We are NOT tax advisors, nor are we offering any kind of tax advice. This website is intended to be used as general information, and any use of these strategies mentioned should be evaluated by your own qualified tax advisor.