Initial system cost for a kW system at $5 per watt: $25,000

Federal Tax Credit (30%): $7,500

* claimed the year the system is put in to service; can be carried forward up to 20 years by businesses, 10 years by individuals.

NC State Tax Credit (35%): $8,750 (taken over 5 years in equal installments of $1,750)

* claimed the year the system is put in to service; businesses are required to take the credit equally over a five year period - each yearly credit distribution has a five year carryforward. A business taxpayer must consider other NC tax credits they've received when accessing the value of this credit. See this NC tax form for more details on this tax credit.

Total MACRS depreciation over the first 6 year of system operation: $21,250.00

* Year 1 $4,250.00 (20%) - Year 2 $6,800.00 (32%) - Year 3 $4,080.00 (19%) - Year 4 $2,448.00 (12%) - Year 5 $2,448.00 (12%) - Year 6 $1,224.00 (6%)

Total MACRS depreciation real dollar value at a tax rate of 30% : $6,375.00

Final system cost after tax benefits: $2,375

Tax benefits as a portion of the system's total installed cost of $25,000.00

Average electricity production per month for the 5kW solar electric system in kilowatt hours: 525 kWh

* System size in kW (5 kW) x Average peak sun hours (4.6 hours) x 365.25 days/12 months x Overall system efficiency (0.75)

Income from the NC Green Power electricity purchase for the 25 year life of the system: $23,627.11 ($945.08 per year)

* NC Green power currently pays $0.15 per kilowatt hour (kWh) for electricity generated by solar electric systems under 10 kW in size. Contracts for power purchase are negotiated yearly. For more information on NC GreenPower visit http://www.ncgreenpower.org/

Income from your electric utility's electricity purchase for the 25 year life of the system: $4,725.42 ($189.02 per year)

* Electrical Utilities pay the wholesale rate for electricity generated by ratepayers and placed on the utility's electrical transmission network or grid. This rate is currently $.03 per kilowatt hour (kWh)

Gross revenues from electricity sales, after fully realizing tax credits and MACRS depreciation, over the 25 year life of the system: $25,977.53

Income and Cost Recovery by Year for the Life of the LLC

Year	Federal Tax Credit	NC Tax Credit	MACRS Depreciation	Electricity Sales	PV System Sale	Total Income	Yearly Fees	Total Expense	Net Expense
1	+ $7500	+ $1750	+ $1275	+ $1134	+ $0	+ $11659	- $200	- $25200	- $13541
2	+ $0	+ $1750	+ $2040	+ $1134	+ $0	+ $4924	- $200	- $13741	- $8817
3	+ $0	+ $1750	+ $1224	+ $1134	+ $0	+ $4108	- $200	- $9017	- $4909
4	+ $0	+ $1750	+ $734	+ $1134	+ $0	+ $3618	- $200	- $5109	- $1491
5	+ $0	+ $1750	+ $734	+ $1134	+ $0	+ $3618	- $200	- $1691	+ $1927
6	+ $0	+ $0	+ $367	+ $1134	+ $0	+ $1501	- $200	- $200	+ $3228

The yearly interest rate received by the LLC for their total investment of $26,200 over the 6 year life of the LLC after fully realizing the tax credits, MACRS depreciation, and projected electricity sales : 2.053%

The yearly interest rate received by the "flip" purchaser for their total investment of $0 over the the remaining 19 year life of the system after paying the flip price and fully realizing the projected yearly electricity sales of $1134 : 0%

* consult your tax and/or accounting professional to ascertain how the above tax credits and MACRS depreciation apply to your tax portfolio. For further consultation on renewable energy tax credits, AIRE recommends the North Carolina accounting firm of Davenport, Marvin, Joyce & Co, LLP for expertise in renewable energy tax credits.

* No provisions were made for income taxes on profits, insurance, maintenance, and property taxes for this estimation. While likely small, these factors should be considered by the system purchaser.

* For an extremely detailed real-world example of how tax benefits can be utilized for the business purchase of a solar electric system, visit the website of TS Designs - the World's Premier sustainable t-shrit producer - at http://tsdesigns.com/solar-payback/.

* A special thanks to Tracy Valentine of Davenport, Marvin, Joyce & Co, LLP whose courteous professional expertise proved invaluable in resolving our many questions during the production of this calculator.