Looking at a recent bid proposal for a commercial PV system I decided to explain some of the solar incentives that a small business can get here in Cumberland County, TN. These may work for for other counties in TN as well, but you would have to check to make sure.
The First incentive (that every small business in America is eligible for) is the 30% 1603 Treasury Grant instead of the 30% tax credit. This means that you will receive a check back for 30% of the cost of the system within 60 days of sending in the paperwork. This incentive is scheduled to terminate on December 31, 2011.
The Second incentive is the USDA Reap Grant. This is only available to small businesses in RURAL counties. It is good for 25% of the cost of the system. There are many guidelines for this grant, but there is still money on the table, so you should contact your representative to see if your business is eligible.
The Third incentive is the 100% bonus depreciation available on your federal income taxes in year one. This replaces the 50% bonus depreciation in year one plus the MACRS (5 year accelerated depreciation). This bonus will allow you to avoid taxes on the total cost of the system. (This may be worth 33% of the total cost of the system if you are in the 33% tax bracket).
The Fouth incentive is the $1000 Bonus that TVA will pay to you if/when you hook up a PV system to their grid.
The Fifth incentive is the 10 year contract that you sign with TVA where they will purchase all of the energy you produce for $.12 ABOVE retail. This means that since we pay $.10 per kwh currently for everything that we buy from TVA they will actually pay $.22 per kWh for everything that our PV system produces.
These incentives make a PV system for a small business here in Cumberland County a slam dunk! We are looking at paybacks of around 6 years or so with an internal rate of return of over 14%.
Passive income has never been so straightforward! Rentals and real estate used to be the way to passive income, then is was franchised fast food restaurants, then it was mini-storage facilities. NOW it is solar!