Incentives Watch: Move Over Wind Energy, There’s a New (Solar Energy) Sheriff in Town

Solar energy continues to grow.  In fact, solar photovoltaic plants are projected to add about 36.7 gigawatts of solar energy in 2013, whereas wind farms are project to add only 35.5 gigawatts, according to a Bloomberg New Energy Financearticle.  Interestingly, this is the first time solar energy output is predicted to beat wind energy output, notes the article.

As solar energy becomes increasingly popular, it is becoming the subject of more and more tax rulings.  The Louisiana Department of Revenue, for example, has been busy issuing tax information about its solar energy system tax credit.   

Recently, the department issued an information bulletin on the state’s new solar credit that became law in June, reports a Bloomberg BNA Weekly State Tax Reportarticle.

Among other changes, the legislation reduces the tax credit amount for leased systems based on certain restrictions placed on the credit, notes the article. 

For leased systems installed before Jan. 1, 2014, the credit equals 50 percent of the first $25,000 of the system’s purchase price.  However, for leased systems installed on or after Jan. 1, 2014, the credit is reduced to 38 percent of the first $25,000 of the system’s purchase price.

In June, the department issued a revenue ruling that explains the sales tax treatment of leased solar panels, according to another Bloomberg BNA Weekly State Tax Reportarticle.  The ruling explains that roof and ground-mounted solar panels leased by homeowners are considered moveable property and, therefore, subject to lease tax.

In addition, an assigned solar energy systems credit, given in exchange for the homeowner’s right to use the solar panels, is subject to lease tax as well.

For more information about various solar energy tax credits and incentives, check out Bloomberg BNA’s Green Incentives Navigator.

In other developments . . .

The New York Department of Taxation and Finance issued an advisory opinion regarding a company’s use of the brownfield tax credit for property it is considering purchasing, according to a Bloomberg BNA Weekly State Tax Reportarticle.  The property has been in the Brownfield Cleanup Program since 2006.


By: Kathleen Caggiano

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