Solar Installation Business Deductions and Equipment Write-Offs

By Yarik Yarosh, CPA ·September 5, 2026 ·4 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Solar installation is an equipment-heavy, materials-heavy trade. Panel and inverter costs typically run 40-50% of job revenue. The remaining revenue covers labor, overhead, and profit. From a tax perspective, solar installers have significant deduction opportunities: vehicle and boom truck depreciation, specialized tools (conduit benders, wire pullers, solar-specific testing equipment), safety gear, and licensing costs. The trade is NOT a specified service trade or business (SSTB), so the full QBI deduction under IRC 199A is available at all income levels.

✓Key takeaway

Major deduction categories for solar installers:

Materials and inventory (40-50% of revenue):

Solar panels (purchased per project, not inventory for most installers)
Inverters (string inverters $1,000-$3,000, microinverters $150-$250 each)
Racking and mounting hardware ($500-$2,000 per system)
Electrical components (conduit, wire, disconnects, breakers)
Batteries for storage systems ($5,000-$15,000 per unit)

Vehicles and heavy equipment:

Boom truck / crane truck: $80,000-$200,000 (7-year MACRS, bonus depreciation eligible)
Box truck or enclosed trailer: $30,000-$80,000 (5-year MACRS)
Service van or pickup: $30,000-$60,000 (5-year MACRS)
Trailer for panel transport: $5,000-$15,000

Specialized tools and equipment:

Conduit bender set: $500-$2,000
Wire pulling equipment: $1,000-$5,000
Solar irradiance meter: $200-$1,000
IV curve tracer: $2,000-$8,000
Thermal imaging camera: $500-$5,000
Multimeters and clamp meters: $100-$500 each
Torque wrenches (for racking): $50-$200
Crimping tools (MC4 connectors): $100-$500
Battery-powered drill sets: $500-$1,500

Safety equipment:

Fall protection harnesses and lanyards: $200-$500 per worker
Roof anchors and tie-off points: $50-$200 each
Hard hats, safety glasses, gloves: $100-$300 per worker/year
Arc flash PPE: $200-$800 per set
First aid kits and AED: $100-$2,000

Software and design tools:

Aurora Solar or Helioscope (design software): $150-$500/month
CRM (Salesforce, HubSpot): $50-$300/month
Project management (Buildertrend, JobNimbus): $50-$200/month
Proposal software: $50-$200/month

Insurance (deductible premiums):

General liability: $2,000-$5,000/year
Workers’ compensation (5-12% of payroll)
Commercial auto: $2,000-$6,000/year
Professional liability (E&O): $1,000-$3,000/year
Inland marine (tools and equipment): $500-$2,000/year

Licensing and continuing education:

Electrical contractor license: $200-$1,000/year
NABCEP certification and renewal: $300-$600
Continuing education courses: $200-$1,000/year
Permit fees (deductible as cost of goods sold or operating expense)

How does equipment depreciation work for solar installers?

Hypothetical example

Round numbers. A solar installation company buys the following equipment in Year 1:

Equipment	Cost	MACRS Life	Bonus Depreciation
Boom truck	$120,000	5-year	100% ($120,000)
Box truck	$50,000	5-year	100% ($50,000)
Tool package	$15,000	5-7 year	100% ($15,000)
Design software (annual)	$4,000	Expensed	N/A (current expense)
Safety equipment	$3,000	Expensed	N/A (current expense)
Total	$192,000

Year 1 depreciation and expenses:

Boom truck (100% bonus): $120,000
Box truck (100% bonus): $50,000
Tools (100% bonus): $15,000
Software: $4,000 (ordinary expense)
Safety equipment: $3,000 (ordinary expense, or de minimis safe harbor under Treas. Reg. 1.263(a)-1(f) if under $2,500 per item)
Total Year 1 deductions from equipment: $192,000

Tax savings at 39.3% combined rate (24% income tax + 15.3% SE tax): $192,000 x 39.3% = $75,456 in Year 1 tax savings

The trade-off: taking 100% bonus depreciation means $0 depreciation in Years 2-5 on these assets. If the business’s income drops in future years (or tax rates change), the owner may have been better off spreading the deduction. But for most growing solar companies, front-loading the deduction is the right call because the time value of money favors taking the deduction now.

Section 179 vs. bonus depreciation for solar installers: Both achieve the same Year 1 result (full expensing). The difference:

Section 179 limit: $2,500,000 (2024), phases out when total equipment purchases exceed $4,000,000
Bonus depreciation: no dollar limit, no phase-out
Section 179 can’t create a loss; bonus depreciation can
For a solar company buying $192,000 in equipment, either method works. Bonus depreciation is simpler (no election needed, applies automatically).

Illustrative numbers only, not a real client and not advice for your facts.

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Cite this page

Yarik Yarosh, CPA. "Solar Installation Business Deductions and Equipment Write-Offs." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/solar-installation-deductions-equipment

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.