Federal Solar Tax Credit

[Haifisch]

I'm in the process of replacing all of my solar charging equipment (Thanks Martin N for your help at the boat show!) I spent about $1000 for a large panel, Victron 100/30, breakers, switches, wiring etc.

Today I stumbled across a 30% Federal Tax Credit that would apply to a first or second home (in this case a boat)

It seems clear that I can get a credit next January on the gear, but am wondering if I could include replacement of my house batteries? See below rules. Does anyone know if a set of 4 Group 31 batteries qualifies as an "Energy Storage System?"

Excerpt from Energysage.com:

What’s covered by the tax credit?
Homeowners who leverage the 30 percent ITC from the federal government can plan to see the following expenditures covered:

Cost of solar panels
Labor costs for installation, including permitting fees, inspection costs, and developer fees
Any and all additional solar equipment, like inverters, wiring, and mounting hardware
Energy storage systems rated three kilowatt-hours (kWh) or greater (starting in 2023).
Sales taxes on eligible expenses

 

[Submariner]

I'm in the process of replacing all of my solar charging equipment (Thanks Martin N for your help at the boat show!) I spent about $1000 for a large panel, Victron 100/30, breakers, switches, wiring etc.

Today I stumbled across a 30% Federal Tax Credit that would apply to a first or second home (in this case a boat)

It seems clear that I can get a credit next January on the gear, but am wondering if I could include replacement of my house batteries? See below rules. Does anyone know if a set of 4 Group 31 batteries qualifies as an "Energy Storage System?"

Excerpt from Energysage.com:

What’s covered by the tax credit?
Homeowners who leverage the 30 percent ITC from the federal government can plan to see the following expenditures covered:

Cost of solar panels
Labor costs for installation, including permitting fees, inspection costs, and developer fees
Any and all additional solar equipment, like inverters, wiring, and mounting hardware
Energy storage systems rated three kilowatt-hours (kWh) or greater (starting in 2023).
Sales taxes on eligible expenses

Great question. A tax advisor I am not! Ha! 🙂


Sent from my iPad using Tapatalk

 

[SJI Sailor]

If I understand correctly the batteries count only if they are dedicated and exclusively or at least primarily charged by the solar system during operation. That would not be the case for most of us using shore power charging. Probably best to ask a solar dealer, though!

However, there are additional state credits in some places that make the overall incentive even better. One list is here: https://www.sunpoweredyachts.com/solartax-credits

 

[Pandion]

Does anyone know if a set of 4 Group 31 batteries qualifies as an "Energy Storage System?"

I am not a tax professional but I researched this tax credit when I was replacing my panels. This section of the tax code has been amended several times, but the term currently used for batteries is "battery storage technology" and here is how it's defined (cut/pasted from the tax code):

(6) Qualified battery storage technology expenditure

The term "qualified battery storage technology expenditure" means an expenditure for battery storage technology which-

(A) is installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer, and

(B) has a capacity of not less than 3 kilowatt hours.

I've seen references to what SJI said about batteries only being charged by the solar panels (no alternator or shore power charging) but that is clearly not in the current code. You can read the current code at this link, which is pretty easy to read for IRS tax law:

https://uscode.house.gov/view.xhtml?req ... section25D

 

[scross]

The sentence that has me confused is “has a capacity of no less than 3 kilowatt hours.”
My solar panel puts out about 1-2 kilowatts hours a month during the winter. But I’m guessing the solar panel output is not what this sentence is about.
My two 110 Amp hour house batteries at 14 volts have 3.1 kilowatt hours of energy. At 13 volts, I come up short at 2.9 kilowatt hours.
However, if I connected the engine battery to the house bank using the CROSSOVER rotary switch, I’m up to 320 Amp Hours in the combined 3 battery bank for a total of 4.2 kilowatts hours of energy - even at 13 volts.
I guess trying to get the solar tax credit for batteries comes down to how innovative you want to be on your tax return.

 

[Pandion]

Yeah, I read capacity requirement as being specific to the batteries. The formatting didn't transfer over when I pasted it but the two requirements were under the bold heading " (6) Qualified battery storage technology expenditure".

I didn't see any requirements for overall system output, though.

 

[Haifisch]

Thanks all for the advice. Really appreciate that WA state would cover the sales tax. Even if I can't get the 4 batteries covered on the tax credit, the solar gear definitely can be covered. The panel I bought was a 375 watt that had to be shipped via freight on a pallet and the freight charge was about $220, so the tax credit will at least mitigate that charge!

Hoping to run "off the grid" this summer once I get everything up and running. Will post the results once I have some data.

 

[scross]

Good luck getting your system installed. Just completed my second installation this month in our new to us 2017 C-28. Our first boat, a 2009 RT-25 Classic didn’t have any solar so it was a full system install with all new wiring. The C-28 was simply a switch out of the panel and controller plus three new batteries, a new breaker, battery monitor and a smart shunt. Much easier.
With a 335 watt panel we should be fairly independent of needing shore power while doing 2-3 week cruises. That’s even with 24x7 use of a portable freezer that’s a power hog.
I bought our panel from Platt Electric which has local stores all over the PNW. No freight charges when you pick up the panel at the local store. Given the reasonable cost of an upgraded solar system and the possible solar tax credit it’s a no brainer in my book if you want to spend time not having to depend on shore power.
Now, even when we are in marinas offering shore power we don’t use it the majority of the time.

 

[SJI Sailor]

Very interesting, @Pandion, thanks for finding that!

This suggests a different question for me, beyond what the OP asked: wouldn't this also apply to new boats? Seems like Fluid Motion could provide a certificate for the solar panel, wiring, controller, and battery costs. Unless someone is already claiming two residences it seems like this would apply.

 

[rheimb1]

When I checked into it three years ago, what I found out was that you have to contribute to the grid, if you're off grid it doesn't count. If you're on the grid but do not put power into the grid, it does not count. But that was 3 years ago.

 

[scross]

According to this Dept of Energy web site, the solar system does not need to be connected to the grid.
https://www.energy.gov/sites/default/fi ... 202021.pdf
It does need to be a new system though. Here’s what it says:
“ The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment.”
If you completely replace all the solar system’s major components is it a “new” system? If you never claimed the solar credit before does that make it a “new system”?
Our former R-25 Classic didn’t have solar so the solar system was definitely a brand new install. On the C-28 I replaced the solar panel, modified the wiring from panel to solar controller, added a resettable breaker, replaced the solar controller and two deep storage batteries and added a battery temp monitor that “talks” to the solar controller. I consider all that would make it a “new” system.
But is it really new for purposes of the solar tax credit? Your guess is as good as mine.