Solar Lease (Non-Tax)

• Customer owns the system, uses the tax credit and accelerate depreciation
• Term is available up to 10 years
• After term of the lease expires, the customer will buy system for a fixed pre-determined amount,
• usually $1.00 or 20% of system cost
• Lease payments will be much higher than projected cost savings produced by the system, but solar incentives can be used by the customer to make up the difference in overall cash flow. In this respect, and for tax and accounting purposes, the Non-Tax Lease is very similar to a bank loan.

Benefits of a Non-Tax Solar Lease

The benefit of a Non-Tax Lease is that it can take advantage of Section 179. Under Section 179, businesses that spend less than $450,000 a year on qualified equipment, can write off up to $112,000 in 2007 ($125,000 in 2008). The rules are designed for small companies, so the $112,000 deduction phases out when a business purchases more than $450,000 in one year. Companies cannot write off more than their taxable income.