January 18, 2006
IAUS offering turbo charged solar tax credit benefit program
International Automated Systems seeks to entice businesses that have a high tax load to help finance their first solar power plant. $9,000 down is returned at tax time, in addition to acquiring a lease of solar property.
by Sterling D. Allan
Pure Energy Systems News Exclusive
Copyright © 2006
Pictured from left to right is Neldon Johnson, CEO of IAUS; Greg Shepard CEO of Bigger Faster Stronger (BFS), who purchased a $9K lease; and Bob Rowbotham, partner in MJM Holding-LC, purchasing two $9K leases.
-- "I really think the IAUS Tax Credit Program is a no-brainer. Instead of paying the IRS, I lease and sublease the IAUS solar energy equipment and make a substantial profit while getting a dollar for dollar tax credit. Where else can you make an investment like that?"
-- Bob Rowbotham: MJM Holding/LC-Partner
Sterling D. Allan, the author of this PESN story, has an agreement with IAUS to receive a referral fee for individuals who sign up for this program.
Taking advantage of the solar tax credits included in the 2005 U.S. Energy Policy, International Automated Systems (IAUS) is financing its first solar power plant installation by offering a special benefit program.
Money you put down on their solar lease program enables you to "earn money from your Federal Income Taxes with 0% of your own money invested -- even if you pay as little as $4,500 per year in income taxes," according to Randy Johnson, Public Relations director for IAUS.
IAUS has a solar technology that they say will generate electricity at a cost comparable to conventional energy sources such as coal or natural gas. Fresnel type lenses focus the sun's heat on a proprietary, bladeless turbine. The system generates electricity for 3 - 5 cents per kilowatt-hour.
IAUS is contracted to install the first phase of their solar power plant near Barstow, California. To accumulate the necessary funds, the company is using this tax incentive method, among other things.
Dr. Greg Shepard, CEO and Founder of Bigger Faster Stronger, Inc., is among those who have put up funds in this manner. He said: "The IAUS solar lease program gives me the ability to get a great tax credit and make money on top of that. But, just as important, it is giving me a chance to participate in a program that should make a significant impact on getting our country not only energy independent but independent with solar energy."
How IAUS Utilizes the Energy Tax Credit
With passage of the 2005 Energy Policy Act the Energy Tax Credit for funding solar production of electricity rose from 10% to 30%. According to a website that promotes the IAUS tax credit, here is how the IAUS pre-paid lease program takes advantage of this. (Ref.)
A basic unit is called an "Alternative Energy System." One unit consists of a 26 foot diameter array of lenses and a collector system. The retail cost for one unit is $30,000. Thirty percent of that produces $9,000 in Energy Credits. IAUS leases one unit for six years to an individual or corporation for $9,000 in cash, pre-paid. The balance of $21,000, minus the mark-up to retail, is paid through other means being engineered by IAUS, which are confidential for proprietary reasons.
With that lease pre payment, IAUS passes on the $9,000 Solar Energy Tax Credits to the lessee. So once the unit is installed, the lessee receives back the full amount that was put down. The tax credit can be used for the taxable year of 2006. Any credit that is unclaimable in that year can be counted to the preceding year, or be carried forward up to 20 years.
Additionally, the individual or corporation who comes in as a lessee can then sub-lease the unit to a power company of choice. The power company takes possession of the unit and produces an income from its use. The sublease is for six years with a quarterly lease payment of $525, going to the sublesser, totaling $12,600 for the six-year lease.
Johnson said that IAUS had its lease plan reviewed by one of the top certified CPA firms in the State of Utah. Additionally, he said that each company that has purchased a solar equipment lease has also had it reviewed by their own independent tax professional prior to purchasing a lease.
Not everyone has enough tax liability to take advantage of the tax credit.
The opportunity does not come without risk. In order for the lessee to be eligible to take the tax credit, the plant must be constructed first. Johnson said that every company purchasing a lease understands this.
Bonus for the First 100 Lens Leases
Johnson said IAUS will be using this first 1MW plant as a reference site for future sales.
"In consideration for this, and the risk involved, each of the first 100 lenses has a referral bonus attached. For each lens leased, the lessee gets .009% of IAUS's gross sales up to $1 billion in sales."
"We are making great strides in developing sizable solar projects outside of this lease plan, however, we are taking every logical and reasonable step to ensure that the first 1 MW plant is constructed as soon as possible."
Risks and Considerations
If IAUS does not garner the balance toward the full amount required for a unit, and hence does not build a unit, the $9,000 could be lost.
Procuring a sub lessee contract is not likely to happen the same day or month that the individual or corporation commences the $9,000 lease through IAUS. As long as an energy utility sub lessee is not procured, the monthly $525 income for six years lease period is not received.
Johnsons says that so far, IAUS has sold over 30 leases and hopes to surpass 50 by the end of January.
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Mary-Sue Haliburton provided editorial input
-Correspondence with Randy Johnson
-http://newtaxcredits.com/Income.html - Site promoting IAUS tax credit program
-Energy Policy Act 2005 - Legal text of H.R.6 as Agreed to or Passed by Both House and Senate
-- --SEC. 1337. BUSINESS SOLAR INVESTMENT TAX CREDIT ?
-http://www.whitehouse.gov/news/releases/2005/08/20050808-6.html energy act signed
801-423-8132 (Tell him you heard about this at PESN.com)
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