Share this
Deductions for HVAC & Solar Project Equipment Under New Tax Law
by Phoenix Energy Technologies on Sep 9, 2019
Many business and residential projects are installing HVAC and solar systems in a bid to go green and cut their costs. And due to the Federal Tax Cuts and Jobs Act that came into effect in 2018, they can also take advantage of significant tax incentives for such installs.
Federal Tax Cuts and Jobs Act
The Federal Tax Cuts and Jobs Act has brought about significant changes in business tax rates, especially for those considering investments in solar or HVAC technology.
Some key points of the Act for businesses include:
- Corporate income tax has been permanently lowered to 21%.
- Section 179 has increased the expensing cap from $500,0000 to $1 million.
- Short-lived capital investments can be expensed fully and immediately for five years.
Maintenance Program Options & Implementing A Predictive Program
On-Site Solar Power Installation
Under the Act, the entire cost of an on-site solar power installation can be depreciated in the first year of its operation. This applies to all solar power generation equipment that has been put into service since September 27, 2017.
Furthermore, you can now also write-off solar power installation within one year at their full 100% cost. This is a big step considering the previous depreciation rate was 50%. Combined with a reduction in the corporate tax rate, this 100% depreciation has convinced many businesses to invest in solar systems.
New HVAC System Installations
Before the Federal Tax Cuts and Jobs Act was passed, installing new HVAC systems came under capital building improvements. It had a long depreciation period, some even extending to 39 years. Now, new HVAC system installations can be easily installed as the full 100% cost can be written off in the first year of installation. This can help maximize the tax benefits for new HVAC install.
Financing Options
In addition to the tax deductions and 100% depreciation in the first year, there are various financing options introduced under the Federal Tax Cuts and Jobs Act of 2017.
Solar installations can be carried out under the following funding options:
- Self-funding (100% depreciation)
- Leasing (Depreciation and tax benefits)
- Power purchase agreement (A low monthly rate to be paid during the life of the system)
If business owners are considering installing solar projects or new HVAC systems, this is the time to do it. A maximum tax and depreciation benefit under the Federal Tax Cuts and Jobs Act is making this much more within reach.
Posts in this series
Top 3 Benefits of Benchmarking for Facilities Management
What Facility Managers Need To Know About Smart Buildings
Are You Managing Your Energy Spend?
4 Common Myths of Energy Conservation in Building Management
Precision Building Management: Understanding Closed Loop Control
Share this
- Facilities Management (85)
- Energy Management (61)
- Company News (46)
- Retail (35)
- Smart Buildings (35)
- Building Management (24)
- Building Automation Systems (19)
- Energy Demand Management (19)
- Sustainability (17)
- EEI (14)
- demand response (13)
- Adaptive Energy Management (12)
- Artificial Intelligence (12)
- Grocery (12)
- COVID-19 (8)
- Customer Spotlight (8)
- Carbon Management (7)
- Setpoints and Temperatures (7)
- Data Integration and Visibility (6)
- Equipment Maintenance (6)
- Ask Ron (5)
- Finance and Procurement (5)
- HVAC IQ (5)
- IoT and Digital Transformation (5)
- Operational Efficiency (5)
- Asset Manager (4)
- Awards (4)
- Safety and Compliance (4)
- Comfort (3)
- Energy & Store Development (3)
- Energy Management System (3)
- Refrigeration Optimization (3)
- ConnexFM (2)
- Customer Service (2)
- Demand Charge Management (2)
- Load Shedding (2)
- Premium Services (2)
- Automated Demand Response (1)
- OSHA (1)
- March 2025 (2)
- February 2025 (1)
- January 2025 (2)
- December 2024 (2)
- October 2024 (1)
- September 2024 (1)
- August 2024 (2)
- June 2024 (2)
- April 2024 (2)
- March 2024 (2)
- January 2024 (1)
- December 2023 (1)
- October 2023 (2)
- September 2023 (2)
- August 2023 (2)
- July 2023 (1)
- May 2023 (2)
- April 2023 (2)
- March 2023 (3)
- February 2023 (1)
- January 2023 (1)
- December 2022 (1)
- November 2022 (2)
- October 2022 (2)
- September 2022 (1)
- May 2022 (2)
- April 2022 (1)
- March 2022 (3)
- February 2022 (2)
- January 2022 (4)
- December 2021 (2)
- November 2021 (3)
- October 2021 (1)
- September 2021 (3)
- August 2021 (4)
- July 2021 (1)
- June 2021 (2)
- May 2021 (1)
- January 2021 (2)
- December 2020 (2)
- November 2020 (2)
- October 2020 (3)
- September 2020 (4)
- August 2020 (3)
- July 2020 (2)
- June 2020 (3)
- May 2020 (3)
- April 2020 (5)
- March 2020 (5)
- February 2020 (4)
- January 2020 (4)
- December 2019 (4)
- November 2019 (3)
- October 2019 (4)
- September 2019 (5)
- August 2019 (4)
- July 2019 (4)
- May 2019 (2)
- April 2019 (3)
- February 2019 (1)
- December 2018 (1)
- November 2018 (1)
- October 2018 (3)
- September 2018 (3)
- August 2018 (3)
- July 2018 (3)
- June 2018 (3)
- May 2018 (1)
- June 2015 (1)
- March 2013 (1)
- January 2013 (1)
- December 2011 (1)
- October 2011 (1)
- September 2011 (1)