Capital depreciation and small wind turbines
POSTED 08/10/10 Like any capital investment, wind turbines depreciate over time. Most turbines have an operational life of around 20 years, although wind conditions, maintenance and weather can alter that span one way or another. New advances in engineering and materials science are also having an effect.At the end of the turbine’s operating period, it must be scrapped, although some of the cost can be recouped at this stage. Fortunately, the capital investment of a small wind turbine is eligible for a straight-line 10 percent depreciation of capital investment.
This will effectively reduce the taxable income of any small business owner who installs a small wind turbine on his or her property, making it easier to invest in renewable power.
When considering alternative sources of power, it’s important to take these considerations into account. Because of the complex interaction of local, state and federal subsidies and tax laws, the true cost of a renewable energy system may be higher or lower than it initially appears.
In the case of wind power, capital depreciation makes it easier for the small business owner to invest in a clean, renewable energy system. However, it’s important for those considering such a system to check their local tax laws, which can treat such systems differently in different states and cities.
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