50% Bonus Depreciation and MACRS

4 posts / 0 new
Last post
kevinclements
50% Bonus Depreciation and MACRS

In order to account for the 50% Bonus Depreciation that takes effect next year in SAM, what should the custom depreciation schedule be set to?

Paul Gilman

Hello,

To model bonus depreciation with MACRS, you may want to consider using the Single Owner option (under Advanced Utility IPP options in the Technology and Market window) where you can explicitly set the bonus depreciation percentage, and apply it to the MACRS depreciation class.

Best regards,
Paul.

HighMtnSolar

I this option only for utility companies? What about a contractor selling a PV installation to a commercial enterprise? I'm guessing the "Commercial" option is the right one, yes?

Paul Gilman

The residential and commercial financing options are suitable for projects that buy and sell electricity at retail rates, and displace a building or facility's electric load.

The commercial PPA and utility IPP financing options are for projects that sell all of the power they generate at a price negotiated through a power purchase agreement (PPA).

Only the advanced utility IPP options (single owner, partnership flip, and sale leaseback) include inputs for the bonus depreciation. The commercial, commercial PPA and "not advanced" utility IPP options can model depreciation, but not the bonus depreciation.

For the scenario you describe ("contractor selling a PV installation to a commercial enterprise"), what metric do you want SAM to calculate? From whose perspective do you want to model the project?

Best regards,
Paul.

Theme by Danetsoft and Danang Probo Sayekti inspired by Maksimer