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Combined Heat and Power Partnership

Modified Accelerated Cost-Recovery System (MACRS)

Date Last Updated1/28/2014
Incentive TypeTax
State/FederalU.S./Federal
Incentive Administrator/Contact OfficeU.S. Internal Revenue Service
Incentive Initiation Date4/18/2011
Incentive Size and Funding SourceUnder the Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from 3 to 50 years, over which the property may be depreciated. Fuel cells, microturbines, CHP, solar-electric and solar-thermal technologies are classified as 5-year properties. In addition, the MACRS classifies certain other biomass properties as 7-year properties.
Eligible RecipientSee "Other Selected Eligibility Criteria" below
Eligible FuelDoes Not Specify
Eligible Project Size (MW)See "Other Selected Eligibility Criteria" below
Minimum Efficiency Required (%)See "Other Selected Eligibility Criteria" below
Other Selected Eligibility CriteriaThe MACRS refers to the energy Business Energy Investment Tax Credit (ITC) to define eligible property. Such property currently includes: fuel cells, microturbines, CHP, a variety of solar-electric and solar-thermal technologies and eligible biomass property.
Application Form(s)Tax Form (PDF) (2 pp, 234K)
Other Incentive DetailsCHP systems are defined as systems that use the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications). To qualify a CHP system must produce at least 20% of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof) and produce at least 20% of its total useful energy in the form of electrical or mechanical power (or combination thereof).
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