On March 8, 2018 the IRS issued a ruling included in a private letter to a solar customer that planned an installation of an energy product. The letter, with the customer anonymous and with the energy product not named, is available on the IRS website:
https://www.irs.gov/pub/irs-wd/201809003.pdf
While the energy product is not revealed, several parameters are, specifically:
"The Battery is expected to have a storage capacity of 13.5 kilowatt hours (“kWh”) and a power rating of 5 kilowatts (“kW”)."
That spec kind of gives the energy product away as those are the specs of a single Tesla PowerWall 2. The customer bought the battery and they wanted to integrate it into their existing solar energy system.
IRC § 25D, normally known as the Residential Energy Property Credit, is usually referred as the Solar ITC credit, and covers 30% of the expenditures made by a taxpayer during the year:
Residential Energy Property Credit (Section 25D) at a Glance
The ITC credit was approved, as long as, according to the IRS:
"When the Battery is constrained to charge only from solar, the software monitors these signals (every 0.1 seconds) and controls the Battery such that charging only occurs when the Solar Energy System is producing energy and only up to the instantaneous solar power. Thus all energy that is used to charge the Battery can be effectively assured to come from the Solar Energy System."
My assumption after reading this letter, is that if the PowerWall would charge at any time from the grid instead of solar, the ITC credit would be denied.
Notice that while the letter ends with "this ruling is directed only to the taxpayer who requested it. Section 6110(k)(3) of the Code provides it may not be used or cited as precedent", anyone with a PowerWall installation can request a similar ruling.
The other important ruling that this letter revealed is that the solar installation and the energy unit(s) do not have to be purchased and installed in the same year, to get the Solar ITC credit on both.
Reading for the Tesla documentation at:
Functionality | Tesla
"When Powerwall is installed with solar, it is not currently able to charge from the grid. Powerwall installations on new and existing solar systems are designed to qualify for the Federal Investment Tax Credit, which requires 100% charging from solar."
https://www.irs.gov/pub/irs-wd/201809003.pdf
While the energy product is not revealed, several parameters are, specifically:
"The Battery is expected to have a storage capacity of 13.5 kilowatt hours (“kWh”) and a power rating of 5 kilowatts (“kW”)."
That spec kind of gives the energy product away as those are the specs of a single Tesla PowerWall 2. The customer bought the battery and they wanted to integrate it into their existing solar energy system.
IRC § 25D, normally known as the Residential Energy Property Credit, is usually referred as the Solar ITC credit, and covers 30% of the expenditures made by a taxpayer during the year:
Residential Energy Property Credit (Section 25D) at a Glance
The ITC credit was approved, as long as, according to the IRS:
"When the Battery is constrained to charge only from solar, the software monitors these signals (every 0.1 seconds) and controls the Battery such that charging only occurs when the Solar Energy System is producing energy and only up to the instantaneous solar power. Thus all energy that is used to charge the Battery can be effectively assured to come from the Solar Energy System."
My assumption after reading this letter, is that if the PowerWall would charge at any time from the grid instead of solar, the ITC credit would be denied.
Notice that while the letter ends with "this ruling is directed only to the taxpayer who requested it. Section 6110(k)(3) of the Code provides it may not be used or cited as precedent", anyone with a PowerWall installation can request a similar ruling.
The other important ruling that this letter revealed is that the solar installation and the energy unit(s) do not have to be purchased and installed in the same year, to get the Solar ITC credit on both.
Reading for the Tesla documentation at:
Functionality | Tesla
"When Powerwall is installed with solar, it is not currently able to charge from the grid. Powerwall installations on new and existing solar systems are designed to qualify for the Federal Investment Tax Credit, which requires 100% charging from solar."
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