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We serve MA, NH, CT, RI, ME, VT, NJ, PA, and TX
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Use the free estimator for a preliminary layout, or share your preferred response method with the commercial team. Final feasibility still requires site, utility, and engineering review.
Modified Accelerated Cost Recovery System (MACRS) lets businesses depreciate commercial solar over 5 years. Under the OBBBA, 100% first-year bonus depreciation was permanently restored for equipment placed in service after January 19, 2025.
Commercial solar is 5-year MACRS property. You start from the system cost, reduce the depreciable basis by half the Section 48E credit claimed, then apply 100% first-year bonus depreciation under IRC Section 168(k) — which expenses the entire remaining basis in year one rather than spreading it across the six-year schedule. The deduction is claimed on IRS Form 4562. Taxpayers may elect the 40% rate instead where that fits their tax position better. For the current first-year rate and why a lower figure still circulates, see the dedicated bonus depreciation page.
5-year accelerated depreciation schedule (vs. 25-year useful life)
100% first-year bonus depreciation, permanently restored by the OBBBA for property placed in service after January 19, 2025
Depreciable basis reduced by 50% of the ITC claimed
Entire depreciable basis can be expensed in year one (taxpayers may elect the 40% rate instead)
At a 35% tax rate, MACRS can reduce net cost by an additional ~25-30% of system cost
Only available to taxable entities (tax-exempt entities use Direct Pay for the ITC)
Taxable businesses and entities
Commercial solar equipment placed in service during the tax year
System must be new (not used equipment)
Taxpayer must have sufficient tax liability to utilize deductions
Use IRS Form 4562 (Depreciation and Amortization)
100% bonus is the default — taxpayers may elect the 40% rate or elect out
Keep records of equipment cost basis and ITC adjustment
OBBBA restores 100% first-year bonus depreciation under IRC §168(k)
100% bonus depreciation — full basis expensed in year one (current year)
100% bonus depreciation is permanent — no scheduled phase-down
The federal rules are the same everywhere; the tax bill they offset is not. These run the same schedule against each state's commercial numbers.
30% (6% without prevailing wage)
The Section 48E Investment Tax Credit provides a 30% credit on commercial solar installations that meet prevailing wage and apprenticeship requirements. This is the cornerstone federal incentive for commercial solar.
100% first-year — permanent
100% first-year bonus depreciation is permanent for commercial solar placed in service after January 19, 2025. The 20% figure that still appears in 2026 articles and AI answers comes from a phasedown the OBBBA repealed.
30% with prevailing wage
Commercial battery storage still earns the 30% Section 48E credit, with no solar-pairing requirement and without the placed-in-service deadline that applies to wind and solar facilities.
Commercial solar is 5-year MACRS property. You start from the system cost, reduce the depreciable basis by half the Section 48E credit claimed, then apply 100% first-year bonus depreciation under IRC Section 168(k) — which expenses the entire remaining basis in year one rather than spreading it across the six-year schedule. The deduction is claimed on IRS Form 4562. Taxpayers may elect the 40% rate instead where that fits their tax position better. For the current first-year rate and why a lower figure still circulates, see the dedicated bonus depreciation page.
Site-specific pricing with exact incentive calculations. No obligation.