Federal Tax Credit - Solar Panels - Is my Math/thinking right?

[Carlos Varum Jr]

Good morning,

Thanks for taking the time to read this and help me wrap my head around this.

So with the recent legislation, my understanding, is that there is a 26% federal tax credit for the purchase AND installation of Solar Panels on a residential property. 

I have several apartments where my business model has been, and will continue, to include utilities with rent... thus I pay the electricity. Some of these apartments even have heat pump/heating and cooling... so the 4 cold months of New England, I get a good sized electric bill... but evens out the rest of the year with small electric bills. That said, I am considering having panels installed on the roofs of these buildings to pay the electric for these units, and in RI we have net metering, so I guess, if there is excess, it goes back to the grid and I get credited.

So let's get to the math:

Let's say, for easy math, an array costs $50,000 installed ( I know it may be higher - again easy math).

To start, I can write off 87% of the cost of the array (my understanding is that you can write off the full cost MINUS 1/2 of the tax credit which equals 87%) which comes out to a $43,500 write off to go against net income from that LLC (which I believe is written off over several years? Or can you Bonus Depreciate Solar Panels?).

Then I get a 26% tax credit, which is equal to a $13,000 tax CREDIT for this LLC. Something very special, from my understanding, because this is a credit on my Tax Obligation. For me to write off $13,000 off of my tax obligation (different than a normal write off) and let's say I am in the 22% tax bracket, that would be comparable to $59,090 additional write off ($13,000 divided by 22%).

Is this not theoretically a $102,590 write off ($59,090 + $43,500) that is passively used to offset my tax obligations over the next several years?  a 105% return on investment?

AND I get free electricity out of it?

So, am I wrong in thinking this is not super advantageous and a no brainer?

Let me know your thoughts!