Depreciation (MACRS) Calculator
MACRS (Modified Accelerated Cost Recovery System) is the standard IRS depreciation method for business property — and most solar, wind, and battery storage equipment qualifies for the 5-year recovery period, one of the shortest available. This calculator takes your depreciable basis, bonus depreciation rate, and MACRS recovery period, then reports the bonus depreciation amount, year-by-year MACRS depreciation under the 5-year half-year convention, and the total depreciation over 6 years. For the tax-credit side of the picture — and the basis-reduction rule that applies when you also claim the ITC — see our ITC / PTC Tax Credit Calculator, and for how these depreciation tax shields flow into project value, see the Net Present Value (NPV) Calculator.
If you also claimed the federal ITC on this project, standard tax rules generally require reducing the depreciable basis by 50% of the ITC amount claimed — confirm with a tax professional.
Bonus depreciation rules have changed significantly with recent federal legislation and the applicable rate depends on when the property was placed in service. Enter your project's current applicable rate after verifying with a tax professional — do not assume a specific percentage.
The 5-year schedule uses the IRS 200% declining balance, half-year convention percentages. Other recovery periods use different published IRS percentage tables — select Custom to override the six year percentages with your own table.
depreciable basis ($) × (bonus depreciation rate (%) ÷ 100)
bonus depreciation amount ($) + year 1 MACRS ($)
remaining basis ($) × 32.00%
remaining basis ($) × 19.20%
remaining basis ($) × 11.52%
remaining basis ($) × 11.52%
remaining basis ($) × 5.76%
bonus depreciation amount ($) + remaining basis ($) — should equal 100% of depreciable basis
Bonus depreciation rules have changed substantially with recent federal legislation. This calculator lets you enter your own applicable bonus depreciation rate rather than assuming one, since the correct current rate depends on when your property was placed in service. Verify the current applicable rate with a tax professional before using these figures in a financial model.
Results update live as you type. For planning and field-check estimates — always verify against applicable standards and equipment ratings.
How we calculate this →MACRS' accelerated schedule front-loads depreciation heavily: a 5-year property recovers 52% of its basis in just the first two years (20% + 32%), compared to only about 17% straight-line depreciation would deliver over the same period. That acceleration is a major reason renewable energy and storage projects using 5-year MACRS can generate such strong early-year tax benefits — but bonus depreciation rules have changed substantially with recent federal legislation, so confirm your project's current applicable bonus depreciation percentage with a tax professional before modeling exact figures.
How MACRS depreciation is calculated
This calculator estimates bonus depreciation, year-by-year MACRS depreciation, and total depreciation over 6 years for qualifying renewable energy property, tying three inputs together: the depreciable basis, the bonus depreciation rate, and the MACRS recovery period. Eight quantities tie the calculation together.
Bonus Depreciation Amount, Year 1 ($) = Depreciable Basis ($) × (Bonus Depreciation Rate (%) ÷ 100). Bonus depreciation, when available, allows a percentage of the depreciable basis to be deducted immediately in year one. The applicable bonus depreciation percentage has changed with recent federal legislation and should be verified for your specific placed-in-service date. At the defaults ($1,000,000 basis, 0% bonus), that is 1,000,000 × 0 = $0.
Remaining Basis for MACRS Schedule ($) = Depreciable Basis ($) × (1 − Bonus Depreciation Rate (%) ÷ 100). The portion of the basis not deducted as bonus depreciation is then depreciated under the standard MACRS percentage schedule over the following years. At the defaults (0% bonus), the remaining basis is the full $1,000,000.
Standard 5-Year MACRS Schedule (200% declining balance, half-year convention). The IRS publishes percentage tables for each recovery period; for 5-year property with the half-year convention the rates are: Year 1 = 20.00%, Year 2 = 32.00%, Year 3 = 19.20%, Year 4 = 11.52%, Year 5 = 11.52%, Year 6 = 5.76%. The half-year convention assumes property is placed in service midway through the first year, which is why a "5-year" recovery period actually spreads deductions across 6 tax years. Each year's MACRS depreciation is the remaining basis multiplied by that year's published percentage.
Year 1 Total Depreciation ($) = Bonus Depreciation Amount ($) + Year 1 MACRS ($). Year 1 combines the immediate bonus deduction with the first year of the MACRS schedule applied to the remaining basis. At the defaults, that is $0 + ($1,000,000 × 20.00%) = $0 + $200,000 = $200,000.
Years 2–6 Depreciation ($) = Remaining Basis ($) × (respective Year MACRS %). Years 2 through 6 are simply the MACRS schedule applied to the remaining basis — bonus depreciation is already fully captured in Year 1, so it does not alter the later-year percentages. At the defaults: Year 2 = $1,000,000 × 32.00% = $320,000; Year 3 = $1,000,000 × 19.20% = $192,000; Year 4 = $1,000,000 × 11.52% = $115,200; Year 5 = $1,000,000 × 11.52% = $115,200; Year 6 = $1,000,000 × 5.76% = $57,600.
Total Depreciation Over 6 Years ($) = Bonus Depreciation Amount ($) + Remaining Basis ($). Summing every year's depreciation recovers the full depreciable basis — a built-in sanity check that the schedule is complete. At the defaults, that is $0 + $1,000,000 = $1,000,000, exactly 100% of the depreciable basis.
Two notes on the model. First, this calculator uses the standard 5-year MACRS schedule with the half-year convention, which is the most common configuration for solar, wind, and battery storage property; the Custom recovery-period option lets you override the six year percentages with a different published IRS table (for example, a mid-quarter convention or a different recovery period), but those alternative tables are not built into the default calculation. Second, if you also claimed the federal Investment Tax Credit on the same property, standard tax rules generally require reducing the depreciable basis by 50% of the ITC amount claimed — the ITC itself already provides a tax benefit on that portion of the cost, and the basis-reduction rule prevents claiming full value twice on the same dollar. Data sources: MACRS depreciation schedules and recovery periods from IRS Publication 946 and Internal Revenue Code Section 168; 5-year recovery period for solar, wind, and battery storage equipment from IRS guidance and Treasury Department regulations; bonus depreciation rules and recent changes from the 2025 One Big Beautiful Bill Act (OBBBA) and Treasury Department implementation guidance; basis reduction rules for ITC interaction from IRS Section 50(c) and Treasury regulations; MACRS vs. straight-line depreciation comparison from tax accounting literature; passive activity loss and at-risk rules from Internal Revenue Code Sections 469 and 465. Verification: with defaults ($1,000,000 basis, 0% bonus depreciation, standard 5-year MACRS), Bonus Depreciation Amount = $0, Year 1 Total = $200,000, Year 2 = $320,000, Year 3 = $192,000, Year 4 = $115,200, Year 5 = $115,200, Year 6 = $57,600, Total Over 6 Years = $1,000,000.