Hello from sunny San Diego!

[Cartwright]

Hey all...

Resurrecting my old thread to give an update in case anyone is interested.

My Solar is being installed now. I went with an installer that is popular on this board for San Diego. I'm installing a system that is bigger than my current needs because an EV will be in my garage "soon" (Tesla Model 3 on order). So here is what I ended up with:

24 LG 315
SolarEdge 7600
$3.54/W before tax rebate

They brought a professional roofing company in to seal everything and I had them fix the area that was leaking and diagnose the issue. That resulted in new gutter drains (the gutters are inside the walls) and they also sold me on a coating from Tropical Roofing. It is a bright white roof now and seems very well sealed. Because that work was being done in preparation for Solar it is getting invoiced through the installer, which means I will also get the tax credit on that.

I've also insisted they run my conduit through the walls, as esthetically I just can't handle conduit down the side of my modern design home. They've been very accommodating and easy to work with.

I decided to pay for my purchase up front, so I'm running it all through various credit cards I signed up for with high mileage bonuses. Will end up with over 200k miles as a result, enough for a really nice vacation!

[sensij]

Hey all...

They brought a professional roofing company in to seal everything and I had them fix the area that was leaking and diagnose the issue. That resulted in new gutter drains (the gutters are inside the walls) and they also sold me on a coating from Tropical Roofing. It is a bright white roof now and seems very well sealed. Because that work was being done in preparation for Solar it is getting invoiced through the installer, which means I will also get the tax credit on that.

I wouldn't count on that logic holding up in an audit, should you find yourself in that situation. However, you are certainly not the only person to interpret the rules this way, and solar companies are happy to go along with it too.

[Cartwright]

I wouldn't count on that logic holding up in an audit, should you find yourself in that situation. However, you are certainly not the only person to interpret the rules this way, and solar companies are happy to go along with it too.

Seems reasonable that the roof needs to be water tight before you put solar on, and this was a much cheaper alternative to replacing the roof, so I think I will argue it pretty hard if it comes to that, but let's just hope and audit isn't in the cards.

[J.P.M.]

Hey all...

Resurrecting my old thread to give an update in case anyone is interested.

My Solar is being installed now. I went with an installer that is popular on this board for San Diego. I'm installing a system that is bigger than my current needs because an EV will be in my garage "soon" (Tesla Model 3 on order). So here is what I ended up with:

24 LG 315
SolarEdge 7600
$3.54/W before tax rebate

They brought a professional roofing company in to seal everything and I had them fix the area that was leaking and diagnose the issue. That resulted in new gutter drains (the gutters are inside the walls) and they also sold me on a coating from Tropical Roofing. It is a bright white roof now and seems very well sealed. Because that work was being done in preparation for Solar it is getting invoiced through the installer, which means I will also get the tax credit on that.

I've also insisted they run my conduit through the walls, as esthetically I just can't handle conduit down the side of my modern design home. They've been very accommodating and easy to work with.

I decided to pay for my purchase up front, so I'm running it all through various credit cards I signed up for with high mileage bonuses. Will end up with over 200k miles as a result, enough for a really nice vacation!

Sounds like your homework paid off. How about another update 30 days or so after startup ?

[Cartwright]

Sounds like your homework paid off. How about another update 30 days or so after startup ?

Will do. I appreciate the help from this forum. By citing the forum as a resource, the installer I went with already knew my pricing target and came in right where I was hoping to be without much haggle.

[J.P.M.]

Will do. I appreciate the help from this forum. By citing the forum as a resource, the installer I went with already knew my pricing target and came in right where I was hoping to be without much haggle.

Understood. Thanx. I look forward to updates/comments.

[sensij]

What is "reasonable" and what is eligible under the law for rebate are different things.

For example, here is guidance from the IRS on an installation of a reflective membrane on the roof, with the purpose of increasing the albedo to increase production of bifacial panels.

https://www.irs.gov/pub/irs-wd/201450013.pdf

Accordingly, we conclude that the Reflective Roof, when installed in connection with the System, constitutes energy property under section 48 of the Code only to the extent that the cost of the Reflective Roof exceeds the cost of reroofing Taxpayer’s building with a non-reflective roof that is allowed by local law.

Here is an older example in which the IRS said that only the costs that were not associated with providing shelter are eligible for the credit.

https://www.irs.gov/pub/irs-wd/1121005.pdf

Accordingly, we conclude that the ---------------------- , as described above, constitutes energy property under § 48(a)(3) of the Code except to the extent that §1.48-9 requires that a portion of the basis of the property is allocable to any portion of such property that performs the function of a roof, e.g., protection from rain, snow, wind, sun, hot or cold temperatures or that provides structural support or insulation

Note that in neither case does the IRS seem to care at all about the technicality of how the system is invoiced.

What is claimed for credit is between you and your tax preparer/attorney (if you have one). I just wouldn't count on the solar companies (or this forum, for that matter, my posts included) as a great source for tax advice.

(Also note that these letters are specifically for Section 48, which I believe applies more to credits on leased/financed systems, not Section 25D, which applies to purchased residential systems. The difference could matter in some cases)

[J.P.M.]

What is "reasonable" and what is eligible under the law for rebate are different things.

For example, here is guidance from the IRS on an installation of a reflective membrane on the roof, with the purpose of increasing the albedo to increase production of bifacial panels.

https://www.irs.gov/pub/irs-wd/201450013.pdf

Here is an older example in which the IRS said that only the costs that were not associated with providing shelter are eligible for the credit.

https://www.irs.gov/pub/irs-wd/1121005.pdf

Note that in neither case does the IRS seem to care at all about the technicality of how the system is invoiced.

What is claimed for credit is between you and your tax preparer/attorney (if you have one). I just wouldn't count on the solar companies (or this forum, for that matter, my posts included) as a great source for tax advice.

Some background as to consistency for multipurpose improvements might be found in how passive solar improvements were handled in the early days of solar tax credits (~~'70/s/'80's or so). Part of the deal/problem then was to determine/assign the extra cost(s) associated with the solar/conservation attributes of the improvement over and above the costs of the non solar attributes.

Anecdotally, I added a sunspace to my residence in Buffalo in the early '80's. None of the cost of the structure was eligible for a tax credit, even though the structure reduced the building heat demand by ~~ 20 %. However, the moveable insulation over the glazing and associated electronics/sensing devices to operate it, and mods. to the HVAC ducting to move heat into the rest of the house were eligible for the tax credit.

I'd suggest some of the cost of structure mod. as the OP describes would be reasonable, but I'd be ready with justification if challenged, and in any case, get good advice from knowledgeable non solar professionals as to what the IRS is most likely to sign off on.

[ncs55]

Hey all...

Resurrecting my old thread to give an update in case anyone is interested.

My Solar is being installed now. I went with an installer that is popular on this board for San Diego. I'm installing a system that is bigger than my current needs because an EV will be in my garage "soon" (Tesla Model 3 on order). So here is what I ended up with:

24 LG 315
SolarEdge 7600
$3.54/W before tax rebate

They brought a professional roofing company in to seal everything and I had them fix the area that was leaking and diagnose the issue. That resulted in new gutter drains (the gutters are inside the walls) and they also sold me on a coating from Tropical Roofing. It is a bright white roof now and seems very well sealed. Because that work was being done in preparation for Solar it is getting invoiced through the installer, which means I will also get the tax credit on that.

I've also insisted they run my conduit through the walls, as esthetically I just can't handle conduit down the side of my modern design home. They've been very accommodating and easy to work with.

I decided to pay for my purchase up front, so I'm running it all through various credit cards I signed up for with high mileage bonuses. Will end up with over 200k miles as a result, enough for a really nice vacation!

Concerning your comment on adding the roof work to the tax credit for solar. You are not correct about what is going on there and roof work does not in any way qualify for a solar tax credit, period.
I see this strategy being pulled all of the time and to be honest the contractor could be sued over selling and doing this. As far as audits, you may never get one, but if your installer gets audited and they find out that work being done was sold in this manner, there will be legal consequences for them and every customer who bought into their lies. And that is Federal money, so the feds would get involved. Simply playing the stupid card, or I did not know any better wont fly in court either. The solar tax credit is written in simple easy to understand text and it is up to the consumer to report this tax credit. So, it is basically tax evasion in the end. Not to mention, wrong on all levels.

[DanKegel]

The following is personal opinion based on half an hour of poking around on dark corners of the internet.


https://www.irs.gov/pub/irs-wd/1121005.pdf is interesting: it seems to indicate
that structural bits can sometimes qualify. But after reading

https://www.law.cornell.edu/cfr/text/26/1.48-9

and swinging a dead chicken over my head, I suspect the deal is more like this:
old buildings simply don't count; to tell whether something qualifies, look
at a new building. If it wouldn't qualify on the new building, it won't qualify
on an old building. So replacing a roof because it was too weak won't qualify
because a roof that doesn't itself process the solar energy isn't solar property.
A roof panel that itself generates electricity *does* count, as does a white
paint job on a roof with bifacial panels (see
http://www.chadbourne.com/Reflective...projectfinance ).

I'd like to be wrong, and wouldn't be terribly surprised to hear there was in fact
an IRS private ruling that did allow reroofing expenses to get the ITC, but I haven't seen one.

https://www.scribd.com/doc/162738401...Book-July-2013 makes an interesting claim:

In a private letter ruling*, the IRS confirmed that a portion of the cost
of the Solar Ready outdoor units may be allocated to the generation of
solar energy and the use of solar energy in the home when attached directly
to 1 or more SunSource solar modules and when both the outdoor unit and
solar module(s) are installed during the same calendar year. Lennox has
determined that 30% of the retail cost of the outdoor unit qualifies for
the Solar Tax Credit and would be eligible for the 30% tax credit. The
result is that the actual Solar Tax Credit would equal 9% (30% of 30%)
of the total retail cost of the outdoor unit.

Really? That seems off to me, but then, I'm no tax guy. And it explains
the existence of that odd Solar Ready A/C product.

[DanKegel]

While I wait for my previous post to be approved, here's one more article on the tax question:

http://solarindustrymag.com/online/issues/SI1412/FEAT_05_IRS-Public-Letter-Rulings-Conflicted-On-Solar-Tax-Credits.html

[Cartwright]

Just to clarify things... I didn't reroof. The roof work done was for sealing the penetrations caused by solar installation and to ensure the roof doesn't leak in the future. The gutter drains, which are unrelated to the solar installation, were paid for by me separately. The potential grey area might be that the level of sealing done was more than absolutely necessary, since the Tropical Coating seals the entire roof. But the roof is and was structurally sound and I am not trying to get a tax credit on repairs to make it sound. Where I am getting a nice benefit is that I had a minor leak which is now fixed as a side effect of sealing the roof.

Furthermore, the coating is a very bright white, and while the LGs aren't bifacial, they do have a double-sided cell structure, so the white coating will potentially benefit solar production.

I hope that clarifies the situation. I might be running right up to the line, but I don't feel I am crossing it, and am prepared to defend the decision in an audit. If the IRS finds that the sealing of the roof isn't covered or only partially covered, then I'll accept that and pay it. If they try to charge me with criminal tax evasion, then I'll see them in court.

[TLUGO]

were you able to find a system to accommodate your home?