Be Careful of Solar Promoters on Tax Credit Calculations

There is a 30% tax credit for solar, however, it is only on your net cost

Photo by American Public Power Association on Unsplash

Many farmers are looking at putting in solar on their farms. USDA will provide 25/50% cost grant under the REAP program in many cases substantially reducing the net cost of the project.

On top of it, there is a 30% federal tax credit that is available to the farmer. If the farmer does not have a enough tax liability to soak up the credit, they can sell the excess credit for cash. There are certain paperwork processes that are needed, but there is a ready exchange to buy these credits.

However, in some of the written material that I see from companies doing these solar projects, they may overestimate the amount of federal tax credits that can be achieved. In most cases, they assume the 30% credit on the cost of the project, but the credit is only on the net cost incurred by the farmer after any non-taxable grants or rebates.