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Bonus Depreciation + MACRS for Clean Energy Property
Grantya researchSee program
OBBBA REWRITE — net effect is FAVORABLE for commercial solar deals. (1) §70301 RESTORED PERMANENT 100% bonus depreciation for qualified property acquired and placed in service after Jan 19, 2025 — the old TCJA phase-down (80%/60%/40%/20%/0%) no longer applies. Most of a solar system's depreciable basis can be expensed in year one. (2) §70509 REMOVED solar and wind energy property from the 5-year MACRS class under §168(e)(3)(B)(vi) for property the construction of which begins after Dec 31, 2024. Solar BOC after that date uses a longer recovery period for any non-bonused basis (taxpayers must rely on cost segregation, engineering analysis, prior IRS rulings, or case law for determining recovery period — Treasury guidance still pending as of 2026-04). (3) BATTERY STORAGE: the literal §70509 statutory text removes only solar and wind, leaving standalone battery storage in the 5-year MACRS class. However, some tax-firm interpretations (e.g., Frost Brown Todd) read §70509 more broadly to include §48-eligible storage facilities. Lori-approved Apr 2026 position: treat standalone storage as retaining 5-year MACRS + 100% bonus, but expect Treasury guidance to clarify scope. Depreciable basis = 85% of system cost after ITC adjustment.
Program details
- Full Name
- IRC §168(k) 100% Bonus Depreciation + MACRS Recovery for Solar, Storage, and Clean Energy Property
- Type
- federal
- Client Type
- commercial
- Project Types
- solar, efficiency
- Eligibility
- Must own the solar/clean energy system (leased systems do not qualify) | System must be used for income-generating business activity | System must be placed in service within the tax year | Property must be acquired after Jan 19, 2025 to qualify for permanent 100% bonus | Depreciable basis reduced by 50% of ITC claimed
- Status
- open
- Stackable With
- section_48e, federal_itc_solar, illinois_shines, il_cpace
- Notes
- The conventional "5-year MACRS + bonus depreciation" pitch needs a rewrite for solar projects with BOC after 12/31/2024: bonus is now 100% permanent (huge cash-flow win), but the recovery period for any non-bonused basis is longer. Net effect on a typical commercial solar deal is still favorable. Battery storage: §70509 statute strictly removes only solar/wind; standalone storage likely retains 5-year MACRS + 100% bonus, but tax-firm interpretation varies (FBT reads §70509 more broadly to include §48 storage). Treasury guidance on both the new solar/wind recovery period and the storage carve-out is still pending as of 2026-04. Consult CPA for optimal ITC + bonus + 179D stacking.
Source: Grantya research. Confirm current terms with the administering agency before applying.