Cost Segregation Study for Renewable Energy Assets is quite unique compared to the traditional real estate assets. Most real estate assets can be segregated for all components other than the underlying land. Since the renewable energy assets is part of the business enterprise components, many preliminary project activities may not be incorporated into the study.
Under the MACRS Depreciation schedule, all REA (Renewable Energy Assets) equipment-related are 5 years life, however it can be selected ADS (Alternative Depreciation Schedule) depending on the taxpayer's preference in the financial projection.
Typical assets under Cost Segregation Study:
5 Years Assets: (For Solar Project) Modules, Racking, Inverters, Transformers, Power Conditioning Equipment, Access Roads, Data Acquisition System, Container Boxes, SCADA Compliance, Switch Gears, Installation of Major Components, Permitting, Foundations, (For Wind Project), Foundation for Turbine, Turbine Tower, Turbine Nacelle with generating set, Blade and Hub, HV Cables, GPO, etc.
Indirect Costs (15 Years): Site Clearing & Grading, Fencing, Extended Warranty, Security
Intangible Assets (20 Years): Interconnection