Renewable Energy Tax Credits

Renewable Energy Tax Credits

North Carolina

Characteristics of North Carolina Solar Credits:

  • Subject to a $2.5M cap per installation.
  • Can only be used to offset 50% of a taxpayer’s NC corporate or individual income tax liability. The 50% limitation is taken into account after the application of all 100% credits.
  • Partnership allocations are based on distributive shares determined by state statutes and I.R.C. Sections 702 and 704.
  • Five-year carry forward of unused credits.

Credit Benefits:

  • May be bifurcated from federal credits and allocated solely to taxpayers desiring only NC tax credits, through a capital lease structure.
  • Can be allocated to different investors each year, as they accrue over a five-year period.
  • No formal recapture provisions. Once the credit has been calculated and earned, the investor cannot lose them in successive years.

Georgia

Georgia is authorized to issue a small number of solar energy credits each year under the Income Tax Credit For Clean Air Property. Monarch Private Capital was engaged to place credits from the largest ground mounted solar farm developed in Georgia.

Characteristics of Georgia Solar Credits:

  • Can be utilized by any entity subject to Georgia income tax.
  • Applicable against bank income and franchise taxes and insurance premium tax.
  • Credits can be allocated to any partner of a partnership or member of an LLC in any manner.
  • No requirement to comply with federal allocation rules contained in IRC Section 704.

Credit Benefits:

  • Excess credits can be carried forward to the succeeding year.