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 The Investment Model Credits The hybrid SECDC investment combines the federal low income community development New Markets Tax Credit, with existing federal and state renewable energy tax incentives. The result is a tax advantaged investment that provides a high after-tax return with very limited risk, and avoids power sale concerns inherent in other green energy investments. SECDC investments are bundled into renewable energy projects of up to $7.5 million each. The total investment is upfront, with a seven year term. Tax credits total 100% of the investment and the project is subject to accelerated depreciation. (Click on the above link to be redirected to the brochure featuring the model) Federal New Market Tax Credits (NMTC): Authorized by 26USC§45D, the Market Tax Credit program promotes investment in federally designated low income communities. Equal to 39% of the overall investment, the credit is taken over seven years (5% in each of the first three years, 6% in each of the following four years). The US Treasury's Community Development Financial Institutions Fund (CDFI) administers this credit. Tax credits are allocated to approved Community Development Entity (CDE) applicants and the credits are issued by the CDE to Investors in the CDE. The CDE must then use that investment to finance business activities in qualified census tracts. Federal Business Energy Investment Tax Credits (BEITC): Available under 26 USC § 48, this credit was significantly expanded under the Energy Improvement and Extension Act of 2008. Equal to 30% of the installation cost of solar or wind systems with no maximum, this credit was historically taken as a tax credit in the first year. However, changes made in the American Recovery and Reinvestment Act of 2009 allow the credit to be converted into a cash grant within 60 days of system activation. North Carolina Renewable Energy Tax Credits (NCRETC): Available under NCGS 105-129.15, this tax incentive became active January 1, 2009. The credit is equal to 35% of the installation cost and is taken equally over five years. There is a maximum of $2.5 million per installation. The amount of credit used in a single year can not exceed 50% of the Investor's North Carolina tax liability reduced by the sum of all other state tax credits taken. The credit can be taken against Corporate tax, Franchise tax, Income tax or Gross premiums tax. Unused credit maybe carried forward for five years. Accelerated Depreciation (MACRS): The investment qualifies for accelerated depreciation over the seven year investment lifespan with approximately 93% taken in the first five years.
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