Loading NuWatt Energy...
We use your location to provide localized solar offers and incentives.
We serve MA, NH, CT, RI, ME, VT, NJ, PA, and TX
Loading NuWatt Energy...
NuWatt designs, installs, and manages solar, battery, heat pump, and EV charger systems across 9 states. One company, one warranty, one point of contact.
Get a Free Quote5-year accelerated depreciation + 20% first-year bonus + Section 48 ITC stacking. 2026 is the last year with any bonus depreciation — it drops to 0% in 2027. No state income tax means simpler filing for NH businesses.
MACRS Schedule
5 Years
vs. 25+ year panel life
2026 Bonus
20%
First-year extra deduction
2027 Bonus
0%
No bonus after 2026
ITC Stacking
30-70%
Section 48/48E credit
The Modified Accelerated Cost Recovery System (MACRS) is a federal tax depreciation method that allows businesses to recover the cost of capital assets through annual deductions. Commercial solar energy systems qualify for 5-year MACRS depreciation — meaning the IRS lets you write off the entire cost of a solar system over just 5 tax years, even though solar panels last 25-30+ years.
This is not a tax credit — it is a tax deduction that reduces your taxable income. The faster you can deduct the cost, the sooner you reduce your tax bill and recover your investment. MACRS front-loads these deductions, with the largest percentages in Years 1 and 2.
For New Hampshire businesses, MACRS is especially valuable because NH has some of the highest commercial electric rates in the country — averaging $0.27/kWh, with Unitil territory reaching $0.26/kWh and Eversource at $0.25/kWh. When you combine accelerated depreciation tax savings with actual electricity cost avoidance, the payback period on commercial solar drops significantly — often to 4-6 years depending on system size and utility territory.
Without MACRS, a business would depreciate solar panels over their useful life (25-39 years using straight-line depreciation), generating small annual deductions. MACRS compresses the entire deduction into 5 years, with most of the value concentrated in Years 1-3. This creates significantly larger deductions when they matter most — during the early years of system ownership when you are recovering your investment.
Unlike Massachusetts and Connecticut, New Hampshire has no broad-based state income tax. This means NH businesses do not face the state-level bonus depreciation "add-back" that creates complexity in neighboring states. Your MACRS deductions flow cleanly through your federal return without state conformity issues. The NH Business Profits Tax (7.5%) applies to net income over $75,000 and generally conforms to federal depreciation rules, providing an additional layer of savings.
In addition to the standard 5-year MACRS schedule, commercial solar systems placed in service in 2026 qualify for 20% first-year bonus depreciation. This allows businesses to deduct an extra 20% of the adjusted depreciable basis in Year 1 — on top of the regular MACRS percentage.
2022
100%
Expired
2023
80%
Expired
2024
60%
Expired
2025
40%
Expired
2026
20%
Current
2027
0%
No Bonus
The Tax Cuts and Jobs Act (TCJA) established a phase-down from 100% bonus depreciation in 2022 to 0% by 2027. A system placed in service in 2026 gets 20% bonus. A system placed in service in 2027 gets nothing — only the standard 5-year MACRS schedule. For a $275,000 NH commercial system, this timing difference means approximately $9,818 more in Year 1 tax savings by acting in 2026.
The MACRS 5-year property class uses the 200% declining balance method switching to straight-line in the later years. With the 2026 bonus, Year 1 captures 36% of the depreciable basis — nearly double the standard rate.
| Year | Standard MACRS | With 20% Bonus (2026) | On $233K Basis* |
|---|---|---|---|
| Year 1 | 20.00% | 36.00% | $84,150 |
| Year 2 | 32.00% | 25.60% | $59,840 |
| Year 3 | 19.20% | 15.36% | $35,904 |
| Year 4 | 11.52% | 9.22% | $21,552 |
| Year 5 | 11.52% | 9.22% | $21,552 |
| Year 6 | 5.76% | 4.60% | $10,753 |
| Total | 100% | 100% | $233,750 |
* Example: $275,000 system with 30% ITC. Depreciable basis = $275,000 - ($82,500 x 50%) = $233,750
Businesses that own their commercial solar system can claim both the Section 48/48E Investment Tax Credit (ITC) and MACRS depreciation. The key interaction: the depreciable basis must be reduced by 50% of the ITC claimed. Here is the step-by-step calculation:
The ITC is a dollar-for-dollar federal tax credit. The base rate is 30% for projects meeting prevailing wage + apprenticeship requirements. Bonus adders can push this to 40%, 50%, or up to 70%.
$275,000 system x 30% = $82,500 ITC (tax credit, not deduction)
Reduce the total system cost by 50% of the ITC claimed. This prevents "double-dipping" — you still depreciate most of the cost, but not the full ITC-covered portion.
$275,000 - ($82,500 x 50%) = $275,000 - $41,250 = $233,750 depreciable basis
Apply the 20% first-year bonus to the adjusted basis, then apply the standard Year 1 MACRS rate (20%) to the remaining balance. The result is a 36% effective Year 1 rate.
Bonus: $233,750 x 20% = $46,750. Regular MACRS: $187,000 x 20% = $37,400. Year 1 total: $84,150
Combine the ITC (dollar-for-dollar credit) with the depreciation deduction (multiplied by your marginal tax rate). For a C-corp filing federally, the rate is 21%. NH has no state income tax add-back.
$82,500 ITC + ($84,150 x 21% federal) = $82,500 + $17,672 = $100,172 Year 1 federal tax benefit
Instead of MACRS, some NH businesses may elect Section 179 expensing to deduct up to $1,220,000 of the system cost in Year 1 (2026 limit). This is a full first-year write-off rather than spreading deductions over 5 years. Section 179 is particularly attractive for smaller systems where the entire cost falls under the limit. However, it cannot be combined with bonus depreciation on the same asset — you choose one or the other.
Section 179 Deep Dive| ITC Rate | Basis Reduction | Depreciable % of Cost | On $275K System |
|---|---|---|---|
| 30% | 15% | 85% | $233,750 |
| 40% | 20% | 80% | $220,000 |
| 50% | 25% | 75% | $206,250 |
| 60% | 30% | 70% | $192,500 |
| 70% | 35% | 65% | $178,750 |
Formula: Depreciable Basis = System Cost - (ITC Amount x 50%). Higher ITC = lower depreciable basis, but the ITC credit itself more than compensates.
New Hampshire has a unique tax structure that makes MACRS solar depreciation simpler than in most neighboring states. Understanding these NH-specific rules is critical for accurate financial modeling.
Unlike Massachusetts and other New England states, NH generally conforms to federal depreciation rules for BPT purposes. This means:
Consult your CPA to confirm current NH BPT conformity rules for your specific entity type.
New Hampshire has no state sales tax — period. Solar equipment, inverters, racking, batteries, and installation labor are all purchased tax-free.
On a $275,000 system: No sales tax to worry about (vs. $17,188 in MA at 6.25%)
This is a permanent NH advantage, not a special exemption
Under RSA 72:62, municipalities may vote to exempt solar energy systems from property tax assessments. This is a local-option statute — each town must adopt it.
~66% of NH towns have adopted this exemption
Check with your local assessor. Does NOT reduce MACRS depreciable basis
NH net metering credits at approximately 85% of retail rate (100% supply + 100% transmission + 25% distribution). This is not 1:1 — commercial systems should model at the actual credit rate for accurate ROI calculations.
Eversource
~$0.25/kWh retail, ~$0.21/kWh credit
Liberty
~$0.24/kWh retail, ~$0.20/kWh credit
Unitil
~$0.26/kWh retail, ~$0.22/kWh credit
NEM 2.0 locked through 2041. Credits at ~85% of retail still provide strong ongoing revenue alongside MACRS + ITC benefits.
The Section 48/48E commercial ITC starts at a 30% base rate and can stack up to 70% with bonus adders. Each adder has specific eligibility requirements. The ITC is available for projects that begin construction before July 4, 2026.
Base ITC: 30%
Prevailing wage + apprenticeship (projects > 1 MW)
Domestic Content (FEOC): +10%
US-manufactured steel, iron, and components. Deadline: July 4, 2026
Energy Community: +10%
Brownfield, closed coal mine/plant, or fossil fuel employment area (check ZIP)
Low-Income: +10-20%
Located in low-income community or serving low-income beneficiaries
Maximum possible ITC: 30% + 10% + 10% + 20% = 70%. On a $275,000 system, that is $192,500 in tax credits.
The residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners who buy solar with cash or a loan receive $0 from the federal government. The Section 48/48E commercial ITC is a separate program that remains available for commercial projects (including third-party-owned residential systems under PPA/lease structures) that begin construction before July 4, 2026. The third-party system owner — not the installer — claims the ITC.
MACRS depreciation requires taxable income to be effective — the deduction is only valuable if you have income to offset. Different business structures benefit in different ways. NH's lack of state income tax simplifies the analysis.
Maximum benefit. C-corps deduct MACRS directly against corporate income at the 21% federal rate. NH has no state income tax on business profits, so the effective rate is the full 21% federal — but with no state conformity issues.
MACRS deductions pass through to shareholders on Schedule K-1. Each shareholder deducts their pro-rata share against personal income on their federal return. NH has no personal income tax, so the benefit is entirely federal.
Similar to S-corps. Depreciation allocations flow through to members per the operating agreement. Tax equity partnerships can optimize allocation. Members file federally only for income tax purposes.
MACRS deductions flow to Schedule C on the federal return. Effective if the owner has significant business income. Limited by passive activity rules if solar is a separate activity. NH Business Profits Tax (7.5%) applies to gross income over $75,000.
Cannot use MACRS directly (no taxable income). Instead, use PPA/lease structures where the for-profit system owner claims MACRS + ITC and passes savings through lower rates.
Let us walk through a real-world example of a 100 kW commercial solar system on a business rooftop in Manchester, New Hampshire. This shows how MACRS, ITC, and NH-specific benefits stack together.
System Size
100 kW
Cost per Watt
$2.75/W
Gross Cost
$275,000
Entity Type
C-Corp
Section 48 ITC (30%)
$275,000 x 30% = dollar-for-dollar tax credit
$82,500
Depreciable Basis
$275,000 - ($82,500 x 50%) = adjusted basis
$233,750
Year 1 Bonus Depreciation (20%)
$233,750 x 20% = bonus deduction
$46,750
Regular Year 1 MACRS (20%)
($233,750 - $46,750) x 20%
$37,400
Total Year 1 Depreciation Deduction
$46,750 + $37,400
$84,150
Year 1 Depreciation Tax Savings
$84,150 x 21% (federal only — no NH income tax)
$17,672
Total Year 1 Tax Benefit
$82,500 ITC + $17,672 depreciation savings
$100,172
No Sales Tax Savings
$0 sales tax
NH has no sales tax — permanent advantage
Property Tax (RSA 72:62)
Check Town
~66% of NH towns adopted exemption. Manchester: Yes
Annual Electricity Savings
~$37,800/yr
140,000 kWh x ~$0.27/kWh avg commercial rate (Eversource)
Net Metering Credits
~85% retail
NEM 2.0: 100% supply + 100% transmission + 25% distribution
Additional MACRS deductions in Years 2-6 plus annual electricity savings (~$37,800/yr at NEM 2.0 credit rates) further reduce effective cost. With BPT savings, typical payback: 4-6 years for NH businesses.
Common questions from business owners and tax advisors about MACRS solar depreciation in New Hampshire.
MACRS (Modified Accelerated Cost Recovery System) allows New Hampshire businesses to depreciate commercial solar systems over 5 years for federal tax purposes, even though solar panels last 25+ years. This front-loads tax deductions, creating significant cash flow benefits in the early years of ownership. In 2026, an additional 20% first-year bonus depreciation is available, further accelerating the tax benefit. The depreciable basis is reduced by 50% of any ITC claimed.
In 2026, businesses can claim 20% first-year bonus depreciation on the adjusted depreciable basis of a solar system, on top of regular MACRS depreciation. For example, on a $275,000 system with 30% ITC ($82,500), the depreciable basis is $233,750. The 20% bonus is $46,750, plus regular first-year MACRS of $37,400 on the remaining balance. This is the last year with any bonus depreciation — it drops to 0% in 2027.
Yes. Businesses that own their commercial solar system can claim both the Section 48/48E ITC (30% base, up to 70% with adders) AND 5-year MACRS depreciation. The only interaction is that the depreciable basis must be reduced by 50% of the ITC claimed. For a 30% ITC, the depreciable basis becomes 85% of the system cost. Both benefits require system ownership — PPA and lease structures transfer these benefits to the third-party owner.
New Hampshire has no broad-based state income tax on business profits in the traditional sense. However, NH does levy the Business Profits Tax (BPT) at 7.5% on net business income over $75,000 and the Business Enterprise Tax (BET) at 0.5% on the enterprise value tax base. For MACRS purposes, since NH largely conforms to federal depreciation rules for BPT calculations, MACRS deductions reduce your BPT liability as well. This is simpler than states like Massachusetts that decouple from federal bonus depreciation.
When combining MACRS with the Section 48 ITC, the depreciable basis is reduced by 50% of the ITC claimed. The formula is: Depreciable Basis = Total System Cost - (ITC Amount x 50%). For example, a $275,000 system with a 30% ITC ($82,500) has a depreciable basis of $275,000 - $41,250 = $233,750. With a 50% ITC ($137,500), the depreciable basis would be $275,000 - $68,750 = $206,250.
C-corporations with high taxable income benefit most, since they can directly deduct MACRS against corporate income at the 21% federal rate. S-corporations and multi-member LLCs also benefit, as depreciation deductions pass through to owners/shareholders via K-1s. Nonprofits and public entities cannot use MACRS directly but benefit indirectly through PPA/lease structures where the for-profit system owner claims MACRS and passes savings through lower rates.
Yes. 2026 offers 20% first-year bonus depreciation for commercial solar — down from 40% in 2025, 60% in 2024, 80% in 2023, and 100% in 2022. In 2027, bonus depreciation drops to 0%. This means 2026 is the final year to capture any first-year bonus depreciation above the standard 20% MACRS Year 1 rate. Projects placed in service in 2027 or later will follow the standard 5-year MACRS schedule without any bonus.
New Hampshire offers a property tax exemption for solar under RSA 72:62, but it is a local-option statute — meaning each municipality must vote to adopt it. Approximately 66% of NH towns have adopted this exemption. There is no state solar rebate (SB 303 repealed it in 2024). NH has no sales tax, so solar equipment purchases are never subject to sales tax. Net metering credits at approximately 85% of retail rate provide ongoing revenue. These exemptions do not reduce the MACRS depreciable basis.
Full commercial solar guide: ITC stacking, net metering, financing, and ROI for NH businesses.
Complete New Hampshire solar overview: costs, incentives, utility territories, and installation timeline.
Current pricing by utility territory. Eversource, Liberty, Unitil, and NHEC rates and payback periods.
National MACRS guide: 5-year schedule, bonus depreciation phase-down, and ITC interaction rules.
Full first-year expensing for commercial solar: $1,220,000 limit, eligibility, and MACRS comparison.
National commercial solar pricing by system size tier. Small business, mid-size, and large-scale benchmarks.
Get a personalized MACRS + ITC tax savings analysis for your New Hampshire business. Our team will model the exact Year 1 benefit based on your system size, entity type, and tax situation.
Projects must begin construction before July 4, 2026 to qualify for Section 48 ITC. 2026 is the last year for bonus depreciation (drops to 0% in 2027).