Claiming Depreciation on Residential Solar Panels in Oregon
For Homeowners, Home-Based Business Owners, and Rental Property Investors
Investing in solar energy in Bend and Central Oregon is a smart move—not just for the environment, but for your finances too. With federal tax credits, Oregon solar incentives, and even depreciation benefits, going solar can offer serious savings.
But did you know that certain homeowners can claim solar depreciation on their taxes? If you have a home-based business, a rental property, or an investment property, you may be eligible to deduct the cost of your solar panels over time.
In this article, we will break down:
- How homeowners can qualify for solar depreciation
- Solar tax incentives, including the 30% Federal Tax Credit
- Bonus depreciation and MACRS for rental and investment properties
- How solar can reduce taxes for home-based business owners
- Key Oregon solar incentives to maximize your savings
Can Homeowners Claim Depreciation on Solar Panels?
For most homeowners, depreciation isn’t available because it applies to assets used for income-generating purposes. However, if you use your home for business, rental income, or investment, you may qualify.
Here’s how depreciation works for different types of homeowners:
1. Primary Residence Homeowners (Personal Use) – No Depreciation, But Big Tax Savings
If your solar panels are installed on your primary residence and you use them solely for personal energy needs, you cannot claim depreciation. However, you still qualify for:
- 30% Federal Solar Tax Credit (ITC) – This reduces your tax liability dollar-for-dollar.
- Energy Trust of Oregon Incentives – National Solar is proud to be an Energy Trust of Oregon Trade Ally Contractor since 2009, offering multiple incentives to new solar customers.
- Net Metering Benefits – Earn credits from Pacific Power, and other local utility companies for excess energy sent to the grid.
Even without depreciation, homeowners can dramatically cut energy bills while taking advantage of tax incentives.
2. Homeowners with a Home-Based Business – Partial Solar Depreciation Available
If you operate a home business—such as a freelance office, daycare, or Airbnb rental, etc.—you may be able to depreciate part of your solar system.
How It Works:
- You can depreciate the portion of your home used exclusively for business.
- Example: If 20% of your home is used for a business, you may depreciate 20% of your solar system’s cost under the MACRS depreciation schedule.
- You can still claim the 30% Federal Solar Tax Credit, but your depreciable basis is reduced by half of the ITC.
Example Calculation:
- A $40,000 solar system installed on a home with 20% business use.
- ITC claimed: $12,000 (30%) → Adjust depreciation basis to $34,000 (85% of system cost).
- 20% of $34,000 = $6,800 eligible for MACRS depreciation over five years.
💡 Best For: Freelancers, remote workers, Airbnb hosts, and small business owners in Bend looking to maximize solar savings.
3. Rental Property Owners & Real Estate Investors – Full Depreciation Benefits
If you install solar panels on a rental or investment property, you can claim 100% depreciation under the Modified Accelerated Cost Recovery System (MACRS). This applies to:
- Long-term rental homes
- Vacation rentals (Airbnb, VRBO, etc.)
- Multi-family rental properties
How It Works:
- Depreciate 85% of the system’s cost (after adjusting for the ITC).
- Bonus depreciation allows for 60% first-year depreciation (2024 phase-out).
- Remaining balance depreciated over five years.
Example Calculation:
- A $50,000 solar system installed on a rental property.
- 30% Federal Tax Credit = $15,000 → Adjusted basis: $42,500 (85% of cost).
- First-Year Bonus Depreciation (60% in 2024) = $25,500 deduction.
- Remaining balance depreciated using MACRS over the next four years.
💡 Best For: Landlords, real estate investors, and property managers in Central Oregon who want to reduce taxable rental income while lowering energy costs.
Maximizing Solar Tax Incentives in Bend & Central Oregon
Aside from depreciation, there are several financial incentives that make solar even more affordable:
1. Federal Solar Tax Credit – 30% ITC
The Investment Tax Credit (ITC) covers 30% of your solar system cost, reducing your federal tax bill.
- Available for homeowners, businesses, and rental properties.
- Carries over if you don’t use the full credit in one year.
2. Energy Trust of Oregon Incentives
- Lowers the cost of solar panels and battery storage for Oregon homeowners.
- Eligible applicants can save up to 15% off the total cost of their system.
3. Oregon Net Metering – Earn Credits for Excess Solar Energy
- Pacific Power, Central Electric Cooperative, PGE, Douglas Electric Cooperative, Salem Electric and EWEB offer net metering.
- Earn energy credits to offset your utility bills.
4. Domestic Content Bonus – Increase Your Federal Tax Credit to 40%!
If your solar system includes U.S.-manufactured panels and inverters, you can increase your solar tax credit from 30% to 40%, under the Fed's Domestic Content Bonus
- Requires iron, steel, and solar components to be 40% U.S.-made.
- Can apply to both residential and commercial solar systems.
Why Bend & Central Oregon Homeowners Should Go Solar Now
The combination of federal tax incentives, Oregon solar rebates, depreciation benefits, and rising energy costs makes 2025 the perfect time to go solar.
Why Choose National Solar?
- ProTrust Certified Installer – We use top-rated REC Solar Panels, Generac Batteries, and Enphase Batteries
- 25-Year Warranty – Peace of mind for long-term savings.
- Local, Oregon-Owned Company – We understand the unique energy needs of Bend & Central Oregon.
- Expert Incentive Guidance – We’ll ensure you claim every tax benefit available.
Get a Free Solar Savings Estimate for Your Home or Investment Rental Property
Whether you're a homeowner, business owner, or real estate investor, we’ll customize a solar system that maximizes your tax benefits and energy savings.
We always recommend consulting your tax professional for your specific situation.