Solar & Sustainable Energy Update: Stimulus Package Adds Bonus Depreciation and Increases...

Solar & Sustainable Energy Update: Stimulus Package Adds Bonus Depreciation
and Increases Section 179 Expense for 2008 Completed Projects
Bonus Depreciation Puts Additional Economic Factor into play for Consideration
to Secure Best Pricing and Strongest ROI on Solar Power Systems

MURRIETA, Calif., Feb. 22 /PRNewswire-USNewswire/ -- The White House 2008
Economic Stimulus Package contains a 50% bonus depreciation and increased
Section 179 expense provisions that could provide significant economic
benefits for certain renewable energy projects that are acquired and placed in
service in 2008. Along with changing State Rebate and Federal Tax Incentives
programs, residential, commercial and public sector decision makers need to
engage professional assistance and move quickly to acquire energy efficiency
and sustainable energy systems for the best price.
The Stimulus Package does not extend the Federal Investment Tax Credit
(ITC). Although efforts are underway to gain such an extension, the ITC, that
has been in existence since January 1, 2006 will expire December 31, 2008.
The ITC now rewards consumers with a 30% tax credit on all technologies that
promote a form of solar energy. There is no cap on the amount of the credit
for business users and there is a $2,000 cap for residential users. The new
energy bill (H.R. 6) will roll the credit back to the former 10% level for
businesses and be discontinued for homeowners at the end of 2008 unless a new
extension is won.
The 50% Bonus Depreciation, effecting commercial property, needs to be
evaluated against a customized pro forma to meet specific objectives. The new
Section 179 rule raises the expense from $112,000 to $250,000 for qualified
capital investments up to $800,000.
Such a customized approach needs to be fulfilled by qualified solar energy
engineers.
The parameters of the Depreciation plan include several factors. To
qualify for bonus depreciation, the property that is part of a renewable
energy project must satisfy the following four criteria: (i) the property must
have a recovery period of 20 years or less under normal tax depreciation
rules, (ii) the original use of the property must commence with the taxpayer
seeking to claim the deduction, (iii) the property generally must be acquired
during 2008 and no written binding contract for the acquisition must have been
in effect before 2008, and (iv) the property must be placed in service during
2008 (or, in certain limited cases, 2009).(1)
To qualify for the Federal Tax credit a solar energy system must be fully
commissioned. This means the system has been designed, installed, tested and
placed into service, per IRS rules. Solar photovoltaic systems, for example,
can take anywhere from 4-6 weeks on a residential rooftop and up to 6 months
for commercial applications, depending on size and design complexity.
Another factor in the pricing landscape for solar power systems in
California is the diminishing California Solar Initiative rebate program.
Solar rebates from this program work on a trigger mechanism. When a certain
level has been fulfilled, then the program drops to the next level and a lower
rebate amount. A qualified solar installation firm can determine the rebates
involved in each project.
A third factor, for those in the territory of Southern California Edison,
is the continued electricity price rate volatility resulting from rate
increases on fossil-fuel based energy sources. In January, residential clients
received a 14.8% price increase in one of the biggest utility areas of the
state, Southern California Edison. Businesses are experiencing a substantial
increase as well in this region.
About HelioPower: HelioPower is a leading sustainable energy integration
firm. With California offices in Murrieta, Sacramento, and Berkeley,
HelioPower designs and installs renewable energy systems, in particular solar
system technology, for residential and commercial clients throughout
California and Nevada. To reach HelioPower call toll free 1 866 Solar 55
(866 765 2755) or visit http://www.heliopower.com.
The statements made in this press release, which are not historical facts,
contain certain forward looking statements to which this release pertains. The
actual results of the specific items described in this release, and the
company's operations generally, may differ materially from what is projected
in such forward looking statements. Although such statements are based upon
the best judgments of the company, significant deviations in magnitude, timing
and other factors may result from business risks and uncertainties including,
without limitation, the companies' dependence on third parties, market
conditions, technical factors and other factors, many of which are beyond the
control of the companies mentioned in this release.
(1) Stoel Rives Tax Bulletin,
http://www.stoel.com/alerts/Tax2_Feb2008.html
SOURCE HelioPower

Glenna Wiseman of HelioPower, 1-866-765-2755, gwiseman@heliopower.com