Only as much as you desire. Our turn-key process allows you to choose solar projects available all over the United States and utilize a pre-designated operations and maintenance provider to manage your solar assets. They are experts in the solar field and will handle ALL of the day to day.

If you desire to use depreciation and solar tax credits to offset tax on (w-2) earnings or income from another business, the IRS regulation requires 100 hours or more of active/material participation in your solar business to take advantage of this benefit.  Don’t worry!  We have created a turnkey process for clients to make reaching this milestone effortless. You will be provided with a detailed time log that will automatically populate from activities you complete within a private portal. You won’t even feel it…

If you only need to offset passive income from other sources, ZERO active/material participation is required.

Material participation refers to the level of active involvement an individual has in a business or investment activity, often determining eligibility for certain tax benefits or deductions based on specific criteria set by tax authorities.

We provide you with a highly experienced and nationally capable solar operations and maintenance provider. (Think "Property Manager" like in Real Estate) They are experts in this business and will handle all of the heavy lifting for you.

Of course, you can independently manage your panels, however most solar business owners we work with have other work/business activities that occupy much of their time, therefore they opt for this turn-key efficiency.

No. You choose when to purchase solar assets and how much. We recommend only purchasing the amount of solar you need to effectively reduce your tax liability annually.

Also, material participation is ONLY required in years you purchase NEW solar projects. It is NOT required in years you do not purchase new solar assets.

Just let us know that you are ready to start looking at solar project purchase opportunities. We will send a Master Purchase & Sales Agreement for you to review/sign & begin sharing deal flow shortly thereafter.

We will of course consult with you to ensure you understand the acquisition process. We will evaluate the first few opportunities alongside you and help you determine if they are a good fit for your solar business.

A Master Purchase and Sales Agreement is a contractual agreement that establishes terms and conditions for solar purchases or sales between two parties, streamlining the process and providing a framework for current and future transactions.

This simply allows you to begin receiving potential project purchase opportunities. It does NOT obligate you to any purchases. (It also contributes to your 100 hours of material participation)

There are multiple ways to exit the business.

Short term options include donation of the panels and future cash flow to a qualified 501c3 or sale to a 3rd party as early as year 6. We do not recommend selling the asset due to the recapture of depreciation required. We will introduce you to charitable organizations that will accept your donation when you are ready to exit.

Other options include, holding it for as long as you desire. The building owner signs a 25 year power purchase agreement that includes two automatic 5 year extensions. It will produce high quality energy for at least 35 years which correlates to cash flow to you annually.

A Power Purchase Agreement is a contract between a producer of electricity (You, the solar business owner) and a customer (A Building owner that desires more cost efficient electricity), stipulating terms for the sale and purchase of electricity over a predetermined period, typically at specified rates and quantities.

An ITC Tax Credit, or Investment Tax Credit, is a tax incentive provided by the federal government for qualified investments, such as renewable energy systems (solar) or energy-efficient equipment. When purchased, between 30% and 60% tax credit is provided to the purchaser to use against their federal tax liability.

Depreciation can be used to reduce taxable income. It will reduce taxable, adjusted gross income by $1 per $1 of depreciation, thereby saving an individual up to .52 cents on each dollar.

This is a specific depreciation schedule set by the federal government for 5.5 years. Currently the federal government allows for “bonus depreciation” to be taken in year one. This accelerates the 5.5 year schedule.

Example: The 2024 Bonus Depreciation allowed in year 1 is 60%. Therefore one can take 60% of the total 5.5 year depreciation schedule in 2024 PLUS the first year % of MACRS. This equals 64% of the total depreciation value.

A P1 Purchase Agreement, when signed, reserves a solar project for future purchase, taking it off the open market. It does not obligate you to purchase the solar project.

A P2 purchase agreement, when signed, completes the purchase transaction of a solar project that was reserved and previously in P1 status. Also, when a P2 agreement is signed, it confirms the project will be “Placed in Service” prior to the Dec 31st deadline. P2 Status gives you official ownership of the project and even more importantly locks in your tax benefits for the year of purchase.

A P3 agreement is simply when the local utility company approves “PTO”. Permission to operate and produce electricity. This is when the solar project begins to produce cash flow.

As much or as little as you desire, however, we will run an analysis to determine the optimal purchase amount for your specific needs. Your purchase amount is dependent on what your current year tax liability will be and how much tax refund you would like to retrieve from prior years tax paid.

This depends on your current tax liability and tax brackets. For example, California residents will save more than Florida residents due to their potential 14.3% state income tax vs Florida’s ZERO state income tax.

The tax benefit ranges between $1.30 to $1.55 of savings for every $1.00 spent in solar. CA residents will receive the higher end of the savings vs states with ZERO or lower income tax rates.

There is also an opportunity to purchase excess solar tax credits at a discounted price. These excess tax credits may be carried back up to 3 years for a refund on previous federal tax paid.

Yes!! You can use excess solar tax credits acquired in the year of purchase and carry them back up to 3 years for a refund on federal income tax paid. This is allowable up to 75% of the amount of tax paid.

In most cases you can purchase a $1 tax refund for significantly less than $1. How much tax refund would you like to receive?

Tax Credit received and depreciation available from a solar asset purchase will offset “ANY & ALL” taxable income, so long as 100 hours of material participation is completed in the year of acquisition. (see material participation FAQ)

Zero material participation is needed for tax credit and depreciation to offset passive income.

$1 dollar of tax credit will fully offset $1 federal tax liability.
Also note, there is a limit to the amount of Investment Tax Credit (ITC) that can be applied against your current year federal tax due. This number ranges from 60% to 70% of your total federal tax liability depending on a few variables.

Any unused tax credit in the year of acquisition, may be carried forward up to 22 years OR carried backward for a refund on federal taxes paid up to 3 years in the past. (Creating a very POWERFUL opportunity!)

Every $1 of depreciation will offset $1 of income you are taxed on, both at the federal level and the state level.

Example: If you have $100,000 of depreciation and $500,000 of adjusted gross income, after you apply the $100,000 of depreciation from solar, you will only be taxed on $400,000 of income.

We will send you project purchase opportunities via email to review as frequently as projects that fit your needs are available.

The best time to purchase solar is Q1 and Q2, however it is possible to purchase later in the year. We recommend you adjust your withholdings and quarterly tax estimates and purchase solar projects with money you would have otherwise paid in tax.

Example: A $100,000 solar purchase can save you up to $150,000, $120,000 in the first year, so why over pay in tax? Reduce your payments and keep that money available to purchase new projects.

An independent escrow agency is available to you at no cost to hold your funds until it is time to finalize your purchase transaction. (Just like real estate) Once the project is complete, you will have the opportunity to officially transact and acquire ownership of the project. This is when your tax benefits are secured.

This will depend on how you structure your solar acquisitions.   Less financing = more cash flow.  More financing = less cash flow.  There are benefits to either method of acquisition.  We will help you evaluate what will be best for you..

Your ROI is Infinite. How? Because you are purchasing the solar projects with money you would have used to pay tax. Therefore you are converting your tax liability into profit.

Accepting financing is not required. It is completely fine for purchasers to pay 100% cash for the projects acquired.

If you do accept seller financing, the energy payment made by the building owner will cover your annual operations & maintenance fees, your loan payment and will also provide you with positive cash flow quarterly.

It is recommended that you personally guarantee the financing received however, this is only for your first solar purchase. Loans received on the 2nd, 3rd, 4th etc projects you purchase DO NOT need a personal guarantee because they are cross collateralized by the equity in the previous solar asset purchased.

Specific to your financing, it is important to be in an “at risk” position in the eyes of the IRS to benefit from the additional value the tax credit and depreciation received at the higher, leveraged purchase price.

It is based on Long Term AFR, which has been hovering between 3% and 4.5% for the past 2 years.   The interest rate is fixed for a 25 year period.  It can be adjusted to accomodate an initial 6 year interest only period, then switch to amortizing from year 7 to 25. 

The management company that provided you with the loan is in a financial position that allows them to defer your loan payments until energy payments are made. It is viable for this to occur for a number of months or even years until the customer is caught up.

In the worst case scenario, a new building owner or tenant of the building will begin making energy payments under a new Power Purchase Agreement. This will continue to cover your annual O&M expense, loan payments and provide you with positive cash flow.

No, not before the end of the 25 year term.

The group financing your purchase is currently holding the notes long term and has no intention of calling a non performing loan due. It is highly possible that the small number of non performing loans over time would simply be written off.

No. This is a private loan that does not require underwriting and does not show up on your personal credit report.

One of the three layers of insurance that are included in your annual O&M fees will be utilized to cover the cost.

Yes they are typically warrantied for up to 30 years.

A new building owner or tenant of the building will begin making energy payments under a new Power Purchase Agreement. This will continue to cover your annual O&M expense, loan payments and provide you with positive cash flow.

You would simply acquire a new O&M provider, similar to property management in real estate. With solar being one of the fastest growing industries in America, there are more and more options to choose from in the marketplace.

Yes

Yes, however we recommend you either hold them for the full term of the power purchase agreement to optimize your profit OR donate them at year 6 after you have received the maximum tax benefit. By donating there is not recapture of depreciation.

Yes

No, your Operations & Maintenance provider will handle 100% of the day to day, from A to Z.