As 2025 begins with a new tax year and the American presidency, there have been significant shifts, especially for solar and general contractors. President Donald Trump has imposed tariffs on imports from Mexico, Canada, and China, affecting the price of supplies for these industries. As a contractor, it’s important to work with a Certified Public Accountant (CPA) to help navigate tax incentives, deductions, and financial planning to protect your margins.
Understanding Tax Incentives and Deductions
In the agriculture epicenter of California, Fresno solar and general contractors have a wealth of tax incentives and deductions at their disposal. California provides general contractors various deductions to reduce their tax burden. These incentives and deductions are designed to encourage the adoption of renewable energy and support the growth of the construction industry in the state.
Some of these tax deductions include energy-efficient commercial buildings, equipment depreciation under the Modified Accelerated Cost Recovery System (MACRS), and deductions for the costs associated with workforce training and certification in renewable energy technologies. By leveraging these federal and state tax credits and deductions, Fresno-based contractors enhance their profitability and contribute to California’s ambitious renewable energy goals, positioning themselves as leaders in an increasingly competitive market. The best way to do this is with a local CPA that understands your business’s unique industry, such as DeMera DeMera Cameron.
Financial Planning for Contractors
So how do these tariffs affect your business? The prices of solar panels, steel, aluminum, and inverters have surged due to increased tariffs on foreign imports. The increased tariffs on steel and aluminum imports will raise material costs, impacting contractors’ service pricing. To mitigate these challenges, it is crucial to financially plan with the help of experts to maintain your profit margins and keep your business afloat. Having a long-term financial strategy can help maintain your profitability and our experts can walk you through the process.
Building Price Increases into Contracts
One way to do this is by building price increases into contracts and adding clauses to address unexpected cost hikes. These clauses help protect contractors’ margins by providing a mechanism to manage inflation and supply chain disruptions. Communicating these changes to customers transparently and early is essential to maintain trust and avoid misunderstandings.
For example, a contract might include a clause stating that if material costs increase by more than 5%, the contract price will be adjusted accordingly. By incorporating these measures, contractors can better navigate the financial uncertainties and maintain project viability. At DeMera DeMera Cameron, we work hand-in-hand with our legal department or yours to ensure that contracts align with financial and legal best practices to safeguard your business.
Navigating tax incentives, rising material costs, and financial planning is crucial for solar and general contractors to remain competitive in Fresno’s evolving market. Partnering with our firm, an experienced local CPA that has been serving the Central Valley for over 80 years, can provide contractors with the expertise needed to proactively handle these challenges effectively.
Contact us today to learn how DeMera DeMera Cameron can support your Fresno solar or general contracting business.
