Going green is a growing business trend that accounting firms are latching onto. In addition to allocating resources to meet the growing demand for accounting expertise related to solar investments, Hedman Partners of Santa Clarita has teamed up with a distributor and installer of solar panels to help businesses navigate the financial intricacies and benefits of solar energy. “We’re seeing that more and more of our clients – people in the business community- are looking at this [solar power] in part because energy costs continue to rise and changes in tax laws are now allowing more business owners to benefit from the federal tax credits,” said Ken Raleigh, partner and tax director at Hedman Partners. Larger accounting firms have already started focusing on solar and renewable energy as a specialized practice area. Moss Adams for example, has been building up its Utilities Group out of Portland, which focuses on alternative energy sources, and offers expertise for businesses seeking to benefit from solar tax credits. “We are now offering this centralized service and the firm is hoping to incubate this service and hopefully begin to roll it out to the other locations,” said Todd Van der Wel, Managing Partner for the Los Angeles Area. “Moss Adams sees a big opportunity in this area.” Among smaller accounting firms however, Hedman Partners is one of the very few that have begun to specialize in solar. In a bold move, the firm partnered with Green Convergence based in Santa Clarita to offer business owners financial expertise when they decide whether or not to invest in solar power. According to Raleigh, there’s much business owners don’t know. Lack of knowledge The current federal solar tax credit allows those who qualify to claim up to 30 percent of the cost of their new solar system including both equipment and installation. The tax credit, which can be used to offset both the regular and alternative minimum tax, only benefits those that owe federal taxes. Hedman Partners helps businesses in everything from calculating the credit to rolling over unused credit; to making financial projections and calculating a return on their investment. The firm helps businesses understand other savings opportunities, how the ownership of the solar panels should be structured and if and when tax credits will be of benefit, among other things. “For example, if a business is breaking even or losing money then the tax credit is not going to be of current benefit,” Raleigh said. Before the partnership, Green Convergence was having a hard time helping business owners make financial sense of solar energy. “We are the largest residential solar contractor in Santa Clarita, but we were having trouble making solar energy pencil out for commercial spaces until we partnered with Hedman,” said D.J. Schramm, president and co-owner of Green Convergence. Answering questions In the past, Green Convergence would engage a business about solar power only to be bombarded with questions from the company’s in-house accountant or the company’s CPA who didn’t know the first thing about solar tax credits. “We were often dealing with accountants that really didn’t get it and didn’t understand it,” he said. “And we didn’t have the financial expertise to answer their questions and really help them understand why this would make business sense.” Now, coming in with accountants that are experts on the subject gives business owners “peace of mind”, said Schramm, since Hedman Partners looks at the business, at the possible investment in solar, at the tax credits and other savings opportunities available, and really studies the financial feasibility of the investment. “It’s made a huge difference,” he said. For Hedman Partners, this deliberate move beyond the traditional accounting practice and towards this specialized tax area, has given them a competitive edge in the Santa Clarita Valley, which has helped them significantly grow their business over the past six months, said Raleigh. “Green Convergence’s market for the commercial application of solar is similar to our market, meaning closely held middle market companies, so there was synergy there, and with the increased interest in solar power it made sense for us to work together,” he said. “This focus is allowing us to better help our existing clients and is helping us find new ones, and not a lot of our competitors are looking into this,” he said. The Numbers: Tax Benefits of Solar Investments • Business owners receive a 30-percent tax credit for both residential and commercial solar installations • They will also be able to deduct up front on the cost of their equipment, through the Small Business Jobs Act, which is expected to pass in Congress and be signed into law in the coming weeks. • The bill also extends bonus depreciation, allowing businesses to immediately write off 50 percent of the cost of new equipment investments in 2010. • As of 2009 the solar tax credit can be used to reduce an owner’s tax liability and offset the Alternative Minimum Tax. Source: Hedman Partners
