By Ken Fields
“Going green” and “going solar” in the Sunshine State are all catch phrases for the new economy, especially as it applies to real estate. Whether a private home or a portfolio of commercial properties, going green is now synonymous with making green by cutting costs and creating long-term property value.
Solar as a technology has been around for decades. Until recently, investing in solar has not been seen as a viable alternative energy source because of its high price tag. However, in the past six months, federal and state governments have instituted a number of tax incentives that make solar affordable.
There are three tax incentives that Realtors should be familiar with should your client have an interest in going green. The first is a federal government incentive, where 30 percent of the total cost of any renewable energy system can be deducted from your federal income taxes in year one. For example, if you install a $50,000 solar panel system, you would be able to write off $15,000, effectively bringing the cost down to $35,000.
The second incentive is specific to Florida, where the total cost of the system is deductible from the taxable value of your property for 10 years. Using the previous example, if your home or commercial property has a taxable value of $500,000 you would be able to reduce that amount to $450,000 for 10 years, or about $1,200 a year depending upon which county you live in.
With these two incentives alone and not even considering the energy savings, a solar panel system has paid for more than 50 percent of its value through tax incentives.
The final incentive, once again, is at the federal level. However, it can only be applied to commercial property. The IRS tax code allows for an accelerated five-year depreciation of all renewable energy systems. On a tax basis, commercial properties payback is a guaranteed five years. Combining the accelerated depreciation with the 30 percent tax credit, the majority of the write-off occurs within the first year.
Whether your client is a residential or a commercial property owner, if that client is currently making a stable income and plans to hold on to the property for at least five years, there is no reason not to go solar.
The final piece to the affordability puzzle for solar is working with a reputable company that is knowledgeable of solar tax credits, how to register for them and how they will positively affect your bottom line.
Ken Fields is director of marketing and public relations for Electron Solar Energy, a Miami-based company that designs, distributes, sells and installs a broad range of renewable energy products for home and businesses. To contact Fields, please e-mail ken@electronsolarenergy.com.
Copyright 2009 Agent Publishing LLC