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HOMER Grid 1.5

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Depreciation is a way of reducing the value of a purchased asset over its usage. It indicates how the value of the asset will decrease over time.

In HOMER Grid, you can apply a depreciation to the following components:

Solar

Storage

Below is an explanation of the various inputs in Depreciation

 

Variable

Description

Depreciation curve (%)

The year by year depreciation percentage

Eligible percent (%)

Portion of capital cost eligible for this incentive

Marginal tax percent (%)

Marginal tax rate

Applies to

The components that this bonus depreciation applies to

Example 1:

Let us consider a PV system of 100 kW which has a total capital cost of 100,000$. If the capital based incentive applied to this PV system is:

hgrid_depreciation_example1

Depreciation in year 0 = 0.20 * Marginal Tax Rate * capital cost = 0.20 * 0.35 * 100,000$ = 7000$

Depreciation in year 1 = 0.40* Marginal Tax Rate * capital cost = 0.40 * 0.35 * 100,000$ = 14,000$

Depreciation in year 2 = 0.60* Marginal Tax Rate * capital cost = 0.60 * 0.35 * 100,000$ = 21,000$

Depreciation in year 3 = 0.80* Marginal Tax Rate * capital cost = 0.80 * 0.35 * 100,000$ = 28,000$

Depreciation in year 4 = 1 * Marginal Tax Rate * capital cost = 1 * 0.35 * 100,000$ = 35,000$

 

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