New tax credits for solar projects in opportunity zones

On March 17th

Last year when congress passed the new tax credit, burred inside there was a tax incentive that can be applied to solar projects. This new tax incentive is complicated, but could add an additional 15% savings to the already 30% saving from the Federal Renewable Energy tax credit. Combined that about HALF OFF a solar installation in the “Opportunity Zone”. Last March 17th Rob Rafon and myself gave a talk about solar power and the tax credits. You can see a recording here.

More information about this tax incentive and the Opportunity Zone map can be found here.

WHAT ARE THE INCENTIVES THAT ENCOURAGE LONG-TERM INVESTMENT IN LOW INCOME COMMUNITIES? Opportunity Zones offer investors the following incentives for putting their capital to work in low-income communities:

  • A temporary tax deferral for capital gains reinvested in an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is sold or December 31, 2026.
  • A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis of the original investment is increased by 10% if the investment in the qualified opportunity zone fund is held by the taxpayer for at least 5 years, and by an additional 5% if held for at least 7 years, excluding up to 15% of the original gain from taxation.
  • A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in a qualified opportunity zone fund, if the investment is held for at least 10 years. (Note: this exclusion applies to the gains accrued from an investment in an Opportunity Fund, not the original gains).

If you’re in the Opportunity Zone and want to install solar on your home, call a solar contractor today and see how they can help monetize these tax credits and lower the cost of solar.

Ypsilanti Wins Second Smart City Award

Last week, Ypsilanti’s Mayor Beth Bashert and SolarYpsi founder Dave Strenski traveled to Denver to collect a Smart 50 Award for a pair of solar projects in the City. The solar projects were unique in that we trained and hire local underemployed residents of Ypsilanti to preform the solar installations on their own low income housing building and on a city building.

The name of our project was “Building Community with Solar Power”.

This was an amazing project and accomplished several goals all at the same time! First the non-profits that received the solar installation will start to save money by having a reduced electric bill. Then, after six years, the solar installation will be paid off and the organization will have free electricity. Second, low-income, underemployed residence learned how to install solar power along with OSHA fall protection and electrical safety training. Third, they were hire, at a living wage, to install the solar power on multiple buildings. Working alongside the solar contractor and members of the community built social bonds across demographics and made relationships that can help in the future. In fact, of the eight trained and hired workers, three got future work: one as a journeyman electrician, one as a roofer, and one with a local solar contractor. Lastly the community was very proud of this project and it created a lot of positive press for the City of Ypsilanti.