OUR ROLE
HOW GEC HELPS
GEC coordinates with your tax advisor to ensure your system is properly documented for MACRS depreciation. We provide the cost segregation data and commissioning records needed to support your filing.
Detailed cost breakdown for depreciation basis calculation
Placed-in-service documentation and commissioning records
Coordination with your CPA or tax counsel on ITC/MACRS interaction
Bonus depreciation timing analysis — optimal year to place in service
Cost segregation analysis for systems with mixed property types
Financial modeling showing Year 1 and cumulative tax savings
COMMON QUESTIONS
FREQUENTLY ASKED QUESTIONS
No. If you claim the 30% ITC, your depreciable basis is reduced by half the credit value (15%), leaving 85% of system cost eligible for depreciation. This is an IRS requirement — you can't double-dip on the same dollars.
Depreciation deductions can create a net operating loss (NOL) that carries forward to offset future income. The deduction isn't lost — it's deferred. Consult your tax advisor on NOL carryforward rules.
It depends. Illinois conforms to federal bonus depreciation. Some states decouple and require separate depreciation schedules. GEC provides documentation for both federal and state filings.
The special 5-year classification for solar and storage was eliminated for projects with construction beginning after December 31, 2024. However, 100% bonus depreciation — now permanent — provides an even faster benefit: full expensing in Year 1 rather than over 5 years. For businesses with sufficient taxable income, this is a better outcome.
Yes, but it's rarely advantageous. Without the 5-year classification, solar assets fall into longer recovery schedules (potentially 20+ years) under standard MACRS rules. For most businesses with taxable income, 100% bonus depreciation is the clear path.
WHO QUALIFIES
ELIGIBILITY REQUIREMENTS
Business must own the system (leased systems don't qualify for the lessee)
System must be used for income-generating activity
System must be placed in service during the tax year claimed
Applies to solar PV systems, battery energy storage, inverters, racking, and electrical equipment
Residential properties don't qualify for MACRS unless used for business purposes.
The 5-year MACRS classification for solar and storage property was modified for projects with construction beginning after December 31, 2024 — consult your tax advisor for how this applies to your specific asset type and timeline. Under current law, 100% bonus depreciation provides an even faster benefit: full expensing in Year 1 rather than over 5 years.
INCENTIVE STACKS
STACKS WITH
PROGRAM DETAILS
WHAT YOU GET
Federal tax law allows businesses to depreciate solar and storage assets and deduct the cost against taxable income. With 100% bonus depreciation now permanent, you can deduct the full depreciable basis in Year 1 — generating immediate tax savings on top of the ITC.
The depreciable basis is 85% of system cost (reduced by half the ITC value). For a $500,000 system claiming the 30% ITC, that means a $425,000 Year 1 deduction — producing $102,000 in tax savings at a 24% rate. Combined with the $150,000 ITC, total Year 1 tax benefit is $252,000 — 50% of system cost.
BONUS DEPRECIATION
100% in Year 1
Available under current law for qualifying property placed in service on or after January 20, 2025.
DEPRECIABLE BASIS
85% of system cost
Reduced by 50% of the ITC amount (15% for a 30% ITC).
COMBINED YEAR 1 BENEFIT
~50% of system cost
$150K ITC + $102K depreciation savings on a $500K system.
EXAMPLE — $500K System
$425,000 deduction
After ITC basis reduction. Produces $102,000 in Year 1 savings at 24% tax rate.
QUALIFIED PROPERTY
Solar PV, storage, inverters, racking
Electrical equipment associated with the system also qualifies.
ELIGIBILITY
Business-owned systems only
Leased systems don't qualify for the lessee.