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MACRS 5-Year Accelerated Depreciation + Bonus Depreciation (Energy Property)
IRSSee programDeadline: N/A — applied at tax filing for the year an asset is placed in service. Bonus depreciation percentages tied to placed-in-service year, not project start.
Federal accelerated depreciation regime under IRC §168 (MACRS) + §168(k) (bonus depreciation). Allows business taxpayers to depreciate qualifying energy assets (storage, EV charging, geothermal, fuel cells) over 5 years instead of 27.5 (residential) or 39 (commercial) years; HOWEVER, OBBBA §70509 removed solar PV and wind from the 5-year MACRS class for begin-construction after Dec 31, 2024 (longer recovery period for their non-bonused basis). Bonus depreciation enables additional first-year deduction — OBBBA (P.L. 119-21) PERMANENTLY RESTORED 100% bonus for property placed in service after 1/19/2025, materially boosting ROI for any 2025+ solar/storage/EV charging project vs the pre-OBBBA phasedown. Combined with §48E ITC: project basis is reduced by 50% of credit value for depreciation purposes (e.g., 30% ITC = 85% basis remaining for MACRS). Critical for solar/storage/EV charging ROI — with 100% bonus restored, projects typically recover 50–70% of capex via tax benefits within the placed-in-service tax year when combined with ITC.
Program details
- Agency
- IRS
- Level
- Federal
- Category
- Depreciation
- Eligibility
- Business taxpayers placing qualifying energy property in service. Eligible asset classes (5-year MACRS): solar water heating, geothermal, fuel cells, battery storage (≥3 kWh standalone or paired with renewable), EV charging stations (Level 2 + DCFC), microgrid controllers. NOTE: OBBBA §70509 REMOVED solar PV and wind from the 5-year MACRS class for property the construction of which begins after Dec 31, 2024 — those assets now use a longer recovery period for any non-bonused basis (Treasury guidance pending). Personal use property not eligible.
- Funding Amount
- Asset cost recovery via 5-year MACRS schedule for qualifying energy property (vs 27.5/39-year for general real property). §168(k) BONUS DEPRECIATION PERMANENTLY RESTORED TO 100% by OBBBA (P.L. 119-21) for property acquired AND placed in service after January 19, 2025. Reverses the TCJA phasedown (which had stepped down to 40% in 2025 and was scheduled to hit 20% in 2026, 0% in 2027+). Pre-1/19/2025 placed-in-service property remains on the legacy phasedown schedule. IRS interim guidance: Notice 2026-11 (issued 2026-01-14).
- Deadline
- N/A — applied at tax filing for the year an asset is placed in service. Bonus depreciation percentages tied to placed-in-service year, not project start.
- Status
- open
- Project Types
- solar, storage, ev_charging, energy_efficiency, financing
- Client Types
- commercial
- Notes
- INFORMATIONAL CORPUS RECORD — not a competitive grant, but essential context for any solar/storage/EV ROI conversation. Research chat must surface this when computing project payback or capital recovery. Default modeling for evlv.energy solar calculator: §48E 30% ITC + 100% §168(k) bonus depreciation (post-1/19/2025 placed-in-service) on the depreciable basis; note OBBBA §70509 removed SOLAR/WIND from 5-yr MACRS (BOC after 1/1/2025) so any non-bonused solar basis uses a longer recovery period — storage and EV charging retain 5-yr MACRS. NEVER stack §48E claimed amount with bonus depreciation on the same basis dollars (basis-reduction rule). 100% bonus is now PERMANENT under OBBBA — major upward revision vs the pre-OBBBA 20%-in-2026 / 0%-in-2027 phasedown that was previously baked into long-range financial projections. Any model still using pre-OBBBA bonus rates must be updated.
Source: Grantya research. Confirm current terms with the administering agency before applying.