Summary:

OpenSolar allows you to display the tax effects of solar for commercial projects within the proposal. This article explains how to enable the feature, configure tax rates, and understand how the tax effect is calculated.

Step 1: Enable Tax Effects in Your Design Template

Before tax effects can be displayed in a proposal, the feature must first be enabled in your Design & Hardware template.

1. Navigate to Control > Design & Hardware > Setbacks & Design Settings.
2. Open the design template you want to use.
3. Enable the Show Tax Effects of Solar (Commercial Only) toggle.
4. Save your changes.

Once enabled, any commercial project using this template can display the tax effect within the proposal.

Step 2: Configure the Project as Commercial

Within your project:

1. Open the Manage page.
2. Under Project Type, select Commercial.
3. Scroll to Site Details.
4. Under Setbacks & Design Settings, select the design template that has Show Tax Effects of Solar (Commercial Only) enabled.

Step 3: Enter the Federal and State Tax Rates

Once the project has been configured as Commercial, two additional fields become available on the Manage page under the Site Details

• Federal Income Tax Rate (%)
• State Income Tax Rate (%)

Enter the appropriate tax rates for your customer.

Important: Interaction with MACRS Depreciation

If your project includes a MACRS Depreciation incentive, the tax rates entered on the Manage page take precedence over the tax percentage configured within the MACRS incentive.

In other words:

• If Federal or State Tax Rate values are entered on the project, MACRS will use those values when calculating depreciation.
• If these fields are left blank, MACRS will use the tax percentage configured within the incentive itself.

Tip: If you want MACRS to calculate using the tax percentage configured in the incentive, leave the Federal and State Tax Rate fields blank.

Viewing the Tax Effect in the Proposal

After entering the tax information, the tax effect is displayed in the Detailed Annual Financial Table within the online proposal.

Note: If you do not have the detailed annual financial table link on the proposal, please edit your proposal template and enable the financial benefits detailed option under the proposal settings. 

How the Tax Effect Is Calculated

The annual tax effect is calculated using the customer's annual bill savings multiplied by the combined tax rate.

Formula

Tax effect = (Utility Bill before solar - Utility bill after solar) x Tax amount

Example:

• Utility bill before solar: 2819
• Utility bill after solar: -70
• Tax set to 21%

(2819 - (-70) = 2889

2889 x 0.21 = 606.69

Tax effect column will display 607