USA | wkyfarmin - 1/19/2024 21:42
once you are in the 35% bracket the tax breaks are not there
The top tax bracket provides a bigger discount to anything that is bought that can be expensed. or depreciated
Fed income tax @ 37% + 3.8% Medicare Tax + 5% State Income Tax= 45.8 % total
Person buys 10 Kw solar system for $35,000 and gets $14000 of SREC rebate, plus 30% solar tax credit.
$35,000- $14,000= - $21,000x 45.8% = - $9618- $10,500 Solar tax credit =$882 after tax cost
Somebody paying 30 % total tax
$35,000 - $14,000= - $21,000x 30%= - $6300- $10,500= $4200 after tax cost
$2200 of electricity produced per year x 2 years = $4400 electricity
$4400 - $882 = $3518 two year gain for 45.8% taxpayer= 199% two year yearly ROI
$4400- $4200= $200 two year gain for 30% taxpayer= 2.4% two year yearly ROI
If there was no SREC rebate
$35,000 x 45.8 % = -$16,030- $10,500= $8470 after tax cost
$35,000 x 30%= - $10,500- $10,500= $14,000 after tax cost
$2200 x 7 years= $15,400
$15,400- $8470= $6930 seven year gain= 11.69% seven year yearly ROI
$15,400-- $14,000= $1400 seven year gain= 1.3% seven year yearly ROI
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