HOMER Grid 1.10
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$. If the capital based incentive applied to this PV system is:
Depreciation in year 0 = 0.20 * Marginal Tax Rate * capital cost = 0.20 * 0.35 * 100,000$ = 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$
