Cost Basis for the ITC and 1603 Applications

Overview and DisclaimerTax Basis and Tax Equity StructuresEffect of Grants, Utility Rebates, Recs and Other IncentivesBorrowed MoneyTax-Exempt and Subsidized Energy FinancingDeveloper FeesReduced 1603 Awards and Potential For AuditsSEIA''s Tax ResourcesGenerally, borrowing money does not adversely affect the taxpayer''s basis in solar equipment. It does not matter whether the owner of a solar project pays for the project entirely out of his own pocket or borrows part of the cost from a bank or other lender. The basis on which the ITC is calculated is what the owner paid for the equipment. Two exce...See more on seia

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Cost Basis for the ITC and 1603 Applications

Many solar companies finance their projects in a way that allows the ITC or 1603 payment to be calculated on the market value of the project rather than its cost. The Treasury prefers a cost-plus