Even if you plan to file an extension, it’s likely that your tax bill is top of mind in the lead-up to April 15.
Imagine if next year you didn’t have to feel that same sense of dread. You might even feel pretty good about tax time.
Despite the fact that the last thing you want to think about is next year’s taxes, the key to flipping the script on April 15 is to put a solar tax strategy in place now: true proactive tax planning. In fact, if you start buying solar assets today, you can mitigate your tax liability not only all year long, but even in years past.
Read on to learn about 5 ways Inception’s solar tax strategy can help you save and change your tax outlook.
When you purchase solar assets, you are entitled to a federal tax credit equal to at least 30% of the total asset value. This tax credit is a dollar for dollar credit –- meaning it eliminates the tax dollars you owe. For example, purchasing a $100,000 solar asset could generate a $30-$40,000 tax credit.
Solar assets also provide federal and state depreciation that lowers your gross income to reduce the taxes you’d otherwise have to pay.
Buying solar assets is not only a strategy that can improve your tax position moving forward, it’s also one that can help you get back some of what you’ve already paid.
The IRS allows you to generate excess investment tax credits and carry those credits back up to three previous tax years to trigger a tax refund check.
You’re purchasing solar assets with the same dollars you would otherwise be giving to the IRS. You’re simply changing the name on the check.
Many of our clients who work with their CPA may reduce withholding on bi-weekly paychecks or quarterly
tax payments and redirect these funds to buy the solar assets. That might mean that instead of making your estimated quarterly payment on April 15, you might use that money to buy solar assets instead.By redirecting your tax payment to support energy independence and resiliency, you can feel good about the positive impact you’re making in communities across the country.
To maximize your solar asset acquisition potential, we recommend starting early in the year and purchasing projects in regular intervals to continuously align your solar portfolio with your growing tax liability. This strategic approach can help ensure that you have the optimal number of assets by year-end to offset as much of your tax burden as possible.
Front-loading solar purchases in the first half of the year ensures you’re able to secure the maximum number of solar assets you can when project economics and availability are the best.
Schedule a meeting to develop your customized 2025 asset purchase plan.
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OPTIMIZE YOUR SOLAR BUSINESS
The US solar industry hosts numerous events throughout the year that serve as important gathering points for solar stakeholders. These networking and innovation opportunities events are an important market growth driver for solar businesses across the United States.
If Las Vegas is calling your name, the solar industry’s largest trade show RE+ will be held at the Venetian Convention & Expo Center and Caesars Forum from September 8-11 this year. More than 40,000 attendees and 1,300+ exhibitors are expected to attend the week-long event.
Or, you might plan a trip to Denver to hear from the analysts at Wood Mackenzie at their 18th Annual Solar & Energy Storage Summit from April 23-24. Panelists there will discuss investment tax credits, market trends, policy and more.
Take a look at this 2025 events calendar for more details on upcoming national gatherings as well as local events in your region.
The hours you spend planning for, traveling to and attending a solar industry event may contribute toward meeting your material participation requirements.
Ray was a senior level sales executive who, post acquisition, successfully exited from his technology company employer with a very large stock option package and K-1 income. His wife is also a high income W-2 tech executive. Learn how they’ve saved with solar.
Before April 15, 2025
For quarterly filers, work with your CPA to determine if redirecting your Q1 estimated payment to buy solar assets is the right strategy for you.
Remember, any time spent reading emails, reviewing documents, or checking your portal may be logged as material participation hours. Don't forget to log them in your portal.
