Master Thread: Energy products and Tax discussions

[TesslaBull]

The entire cost of a ground mount solar array would qualify for the 30% tax credit, including the labor and materials of the ground mount structure required to support the panels.

Along those lines, if a brand new roof structure were built where no roof structure previously existed, for the purpose of supporting solar panels, would said roof structure be eligible for the tax credit along with the solar panels themselves?

One example would be a solar carport. Another would be a roof structure built over a concrete patio for the sole purpose of adding solar panels.

Thoughts?

 

[lensovet]

Energy Incentives for Individuals: Residential Property Updated Questions and Answers | Internal Revenue Service

Updated questions and answers on the residential energy property credit.

www.irs.gov

The burden of proof, in case of an audit, would be on you, the taxpayer, to prove that 100% of the roof structure that exists is there to support the solar panels.

In practical terms, I suspect most roof structures would not qualify, as their construction would be in excess of what is needed for a solar array alone.

 

[lodar]

So after all the back and forth, it's still ambiguous. Assuming one had an old install, does one fall under the rules/guidelines of previous tax policy or the new IRA? I would assume old installs fall under old policy.

These 3 articles state pretty much the same thing and sounds like you need to solar charge 100%. People should do their own research and even though Jeremy3292 isn't worried to grid charge off-peak and export all on-peak, he is doing a post IRA battery install so that might be different from your case.

During the latest round of Pineapple Express storms, I have been tempted to grid charge to top off my Powerwalls. So I did some poking around to add my 1 cent to the debate.

WARNING: IANAL! I’ve read municipal codes, IETF RFCs, and code diffs on github

I am going to put some arguments in favor of grid charging by debunking a key argument against it.

References:
26 USC 25D: Residential energy efficient property
Text contains those laws in effect on January 3, 2022

• Pre-IRA where no mention of batteries.

26 USC 25D: Residential clean energy creditText contains those laws in effect on January 5, 2023

• Post-IRA where “qualified battery storage technology expenditures” was added.

Myth: “My batteries were installed pre-IRA, so I am beholden to the version of the law that didn’t cover battery storage”

Bust: My Powerwalls were installed in 2022. That means they would have been pre-IRA and I should have received the 26% credit. BUT… by the time I filed my taxes in April 2023, TurboTax claimed 30% credit!!! No IRS corrections were made.

If my pre-IRA batteries fell under the effect of the post-IRA laws. Then, my batteries should be fully recognized by the law too!

In my case of 2022 Powerwalls, since I claimed my 30% against the post-IRA laws. Even if I follwed the myth and was beholden to the law I got the credit from, I guess I am beholden to the new 2023 laws!

This is my strongest argument. Here’s a few more.

Q: Was the IRA Retroactive, Prospective, or a Clarification?

I’m going to argue that it’s moot.

If Retroactive: I think it is. Both with my tax credit example. AND if look at “(g) Applicable Percentage” Congress was very careful to split the 26% period because the changes were intended to be retroactive and they didn’t want folks with 2020 and 2021 vintage batteries asking for another 4%

Pre-IRA:

For purposes of subsection (a), the applicable percentage shall be-

(1) in the case of property placed in service after December 31, 2016, and before January 1, 2020, 30 percent,

(2) in the case of property placed in service after December 31, 2019, and before January 1, 2023, 26 percent, and

(3) in the case of property placed in service after December 31, 2022, and before January 1, 2024, 22 percent.

Post-IRA becomes:

For purposes of subsection (a), the applicable percentage shall be-

(1) in the case of property placed in service after December 31, 2016, and before January 1, 2020, 30 percent,

(2) in the case of property placed in service after December 31, 2019, and before January 1, 2022, 26 percent,

(3) in the case of property placed in service after December 31, 2021, and before January 1, 2033, 30 percent,

(4) in the case of property placed in service after December 31, 2032, and before January 1, 2034, 26 percent, and

(5) in the case of property placed in service after December 31, 2033, and before January 1, 2035, 22 percent.

Prospective: Let’s assume the law was “from 2023 onward”. One could argue that the IRA could have successfully audited you all the way until January 4th, 2023 and won! But can they really charge you for a crime that is no longer criminal now?

Put another way, if you were illegally grid charging before 1/5/2023, then you still better lay low!

Clarification: There is a strong case that the IRA didn’t “change the law”, it merely clarified a shortcoming that the PLA “hacked” around.

Essentially, the PLA treated Powerwalls like a capacitor in the solar inverters. They were an integral part of the solar system. The 100% solar part was to distinguish it from any other battery in your house. That was the best hack they could come up with until Congress could clarify.

However we’d like to think of Congress today, whoever wrote the IRA were not stupid or unwilling to admit a mistake. They clarified that battery storage counted towards the clean energy credit. PERIOD.

 

[holeydonut]

Are any of you all planning to submit for the tax incentives on form 5695 Residential Energy Credits when filing your 2023 tax return? TMC has the most energy-minded cool people on Earth, so I assume ya'll are trying to take advantage of these credits. Plus we all love to save money right? Yeahhhhh. For 2023 it seems qualifying energy home improvements can get $600 tax rebate regardless of your income.

Unfortunately, I can't find a CPA for broke-azz losers like myself who will discuss the new rules for a regular 1040 married filing jointly middle-class tax submission. I'm not going to pay hundreds in consulting fees to a high end CPA at some expensive wealth management shop. And the churn and burn CPA's just have a blank look when I bring this up. So I'll consult with you all experts instead (eg: @Redhill_qik and @miimura ).

On this form 5695 under the Part II IRA's Energy Efficient Home Improvement Credit there's a "Smart Worksheet". One of the items in this section is for windows and skylights that meet or exceed the version 6.0 Energy Star Program Requirements.

The thing I want to confirm is that all I need to do is identify that the installed windows or exceed the v 6.0 criteria for the specific geographic area of the installation. So, if the product beats the number on the Energy Star thing, then I'm fine slamming the investment $ in that 5695 form. Then taxpayers will help pay for my baller ass windows. Then for 2024, I'll get a new front door and clip another $600 on a qualifying door.

For example, I'm in the South-Central Energy Star Zone (just East of the San Francisco Bay Area). This means the U factor has to be less than 0.30 and the Solar Heat Gain Coefficient (SHGC) should be < 0.25. The windows I installed are Anlin Del Mar Single Slider SunMatrix Argon without Grids. Their rated spec sheet is a U Factor of 0.26 and a SHGC of 0.17.



Snippet from IRS From 5695

About Form 5695, Residential Energy Credits | Internal Revenue Service

Information about Form 5695, Residential Energy Credits, including recent updates, related forms and instructions on how to file. Use Form 5695 to figure and take your nonbusiness energy property credit and residential energy efficient property credit.

www.irs.gov

Snippet from Energy Star Requirements V6

https://www.energystar.gov/sites/default/files/Windows_Doors_and_Skylights_Program_Requirements%20v6.pdf

Snippet from the Anlin Del Mar Spec Sheet with red arrows pointing at what I think the EPA measures:

https://anlin.com/wp-content/uploads/2019/12/DelMar_Performance_Data.pdf

Here's my previous thread where I discuss the $600.

Inflation Reduction Act Tax Incentives for Energy (not related to PV+ESS and EVs)

I've been researching some of the energy-related tax incentives in the latest Inflation Reduction Act (IRA). While I am clearly an idiot (have you read my posts on TMC? they're usually just me ranting about PG&E sucking or talking about blade disconnects), I figure it could be useful to share...

teslamotorsclub.com

PS: SGIP is still 1000x more difficult to get than this tax incentive. Those mf-ers send people to your house to take pictures of your install and ask you to turn on ever electrical load in your house to prove your sustained kW consumption. Sheeeesh.

 

[miimura]

I don't know about doors and windows, but I will be looking at heat pumps. I have a 97% efficient condensing gas furnace that doesn't have an A/C unit installed. I have a quote to add a heat pump that will make it a "hybrid" heating system plus A/C. I will be looking into the tax credit for this situation. The local rebates for heat pumps require upgrading from electric heat or removing a gas appliance. The cost of ripping and replacing the existing furnace and installing a heat pump only air handler is a greater adder than the increased rebates.

 

[holeydonut]

I don't know about doors and windows, but I will be looking at heat pumps. I have a 97% efficient condensing gas furnace that doesn't have an A/C unit installed. I have a quote to add a heat pump that will make it a "hybrid" heating system plus A/C. I will be looking into the tax credit for this situation. The local rebates for heat pumps require upgrading from electric heat or removing a gas appliance. The cost of ripping and replacing the existing furnace and installing a heat pump only air handler is a greater adder than the increased rebates.

You should look at my other thread about this:

Inflation Reduction Act Tax Incentives for Energy (not related to PV+ESS and EVs)

I've been researching some of the energy-related tax incentives in the latest Inflation Reduction Act (IRA). While I am clearly an idiot (have you read my posts on TMC? they're usually just me ranting about PG&E sucking or talking about blade disconnects), I figure it could be useful to share...

teslamotorsclub.com

Qualifying heat pumps get a $2k incentive under the Energy Efficient Home Improvement Credit. My understanding is that the Bryant model my neighbor installed (38MGRB) gets the $2k. But I can't even tell if my Windows qualify, so I'm not 100% sure about the heat pump.

In 2023 my neighbor replaced his full 2 zone HVAC that used to be forced air furnace + outdoor condensing units & coils. The quote to replace 2x 3 ton NG furnaces + 2x 3 ton condensing units + 2x 3 ton coils + labor with "like for like" NG gear was $33k. 14 total registers and like 3,500 sq ft with full vaulted ceilings.

But, I steered him to a heat pump option ... Bryant multi-zone heat pump (38MGRB) and 2x Bryant ducted variable speed air handlers (40MBAB) to plug in to existing spaces and replace everything (still plugged into the same HVAC electrical subpanel and pressure lines). Up front cost was $20k. Where we're confused is if the heat pump gets ITC (30% or $3,200) off or if it's the $2k cap based on this Energy Efficient Home Improvement Credit. His installer told him he'd get the ITC. But I don't think that's the case for 2023.

 

[lensovet]

I don't know how to resolve the discrepancy, but the Energy Star website claims that the windows must specifically meet the ENERGY STAR Most Efficient criteria, as opposed to plain ES. See Windows & Skylights Tax Credit.

This is actually, as far as I can tell, a difference from prior years, which required ES alone, without the most efficient qualification.

 

[lensovet]

TT23 says this in its guidance:

The IRS cautions that the manufacturer's certification is different from the Department of Energy's Energy Star label, and not all Energy Star labeled products qualify for the tax credits.

 

[lensovet]

The thing I want to confirm is that all I need to do is identify that the installed windows or exceed the v 6.0 criteria for the specific geographic area of the installation. So, if the product beats the number on the Energy Star thing, then I'm fine slamming the investment $ in that 5695 form. Then taxpayers will help pay for my baller ass windows. Then for 2024, I'll get a new front door and clip another $600 on a qualifying door.

As a general rule, you should not be doing this. The consumer does not get to decide whether a window or door qualifies for ES; the manufacturer does.

Even if the "most efficient" rule did not apply in this case, if the window or door does not have an Energy Star label on it that includes the geographic area where your house is located, you cannot claim that it satisfies ES criteria, even if you can point at a chart that says that it should.

Also, I just compared to the 2022 and before rules, and there is indeed a change. The old rules simply required ES certification for your location, covered 10% of the cost, and maxed out at $200 for windows and $500 for doors. The new rules cover 30% of the cost and cap out at $600 for windows, but require the most efficient label to qualify. Doors also go up to 30%, are capped at $250/door and $500/year, but only require regular ES certification and nothing else.

 

[holeydonut]

TT23 says this in its guidance:

Ooooooo Ok so there's a database to search for qualifying products under the latest rules that would apply to 2023 tax filings. Anlin Del Mar is on there as "most efficient". Yay. $600 here I come.

Product Finder — ENERGY STAR Certified Windows, Doors & Skylights

Compare ENERGY STAR Certified Windows, Doors & Skylights, find rebates, and learn more.

www.energystar.gov

 

[wwu123]

I don't know about doors and windows, but I will be looking at heat pumps. I have a 97% efficient condensing gas furnace that doesn't have an A/C unit installed. I have a quote to add a heat pump that will make it a "hybrid" heating system plus A/C. I will be looking into the tax credit for this situation. The local rebates for heat pumps require upgrading from electric heat or removing a gas appliance. The cost of ripping and replacing the existing furnace and installing a heat pump only air handler is a greater adder than the increased rebates.

I posted in the other thread that I've just started looking at the same, only mine is a 96% efficient condensing gas furnace, and I have a 60-year old A/C unit that still sitting on it despite not working in 20+ years.

But I think I just realized that only Energy Star certified heat pumps will qualify, and I believe the Energy Star ratings will only apply to tested AHRI combination - which probably has to be matched outdoor condenser unit, evaporator coil AND air handler/furnace. Even my furnace maker, Carrier, is unlikely to have tested my discontinued 10-year-old furnace model against their current heat pumps. Not to mention I was leaning towards third-party inverter heat pumps like Bosch that don't require proprietary thermostats....

Have two HVAC contractors coming tomorrow to quote Bosch and other brands, will ask them about it...

EDIT: Maybe it's just the condenser and coil that have to match, the AHRI certificates specify a specific tested air handler/furnace, but hope maybe that's not part of the actual requirement...

 

[lensovet]

Anlin Del Mar is on there as "most efficient". Yay. $600 here I come.

Again, that's just a lineup name. Is yours a horizontal sliding window? Are you in the southern zone? You'll note that there are 6 specific configurations that are certified for the southern zone only and no other options certified for any of the other zones.

 

[holeydonut]

Again, that's just a lineup name. Is yours a horizontal sliding window? Are you in the southern zone? You'll note that there are 6 specific configurations that are certified for the southern zone only and no other options certified for any of the other zones.

My dude, check it out. Above I said:
The windows I installed are Anlin Del Mar Single Slider SunMatrix Argon without Grids

Based on what you're saying I should just play along with Energy Star's own recommendation to just "look for the labels"

ENERGY STAR

ENERGY STAR makes it easy for consumers and businesses to save money and protect the environment.

www.energystar.gov

Anlin claims to have the label on their Del Mar line, so I'll roll with it.

Del Mar Collection

Anlin Del Mar Windows offer beauty, durability, and energy efficiency. Available in single hung, single slider, picture and geometric windows.

anlin.com

 

[BGbreeder]

@holeydonut My issue with sliding windows is the generally lower performance when it comes to air leakage;

https://anlin.com/wp-content/uploads/2023/10/Del-Mar-Performance-Data-11.01.23.pdf

Have you considered a different style of window?

All the best,

BG

 

[holeydonut]

@holeydonut My issue with sliding windows is the generally lower performance when it comes to air leakage;

https://anlin.com/wp-content/uploads/2023/10/Del-Mar-Performance-Data-11.01.23.pdf

Have you considered a different style of window?

All the best,

BG

Like for like replacement to the previous style. Wife happiness is more important than energy leakage even with energy star ratings for magical geographic zones.

 

[lensovet]

Based on what you're saying I should just play along with Energy Star's own recommendation to just "look for the labels"

ENERGY STAR

ENERGY STAR makes it easy for consumers and businesses to save money and protect the environment.

www.energystar.gov

Does your label say most efficient?

That seems to be the critical part that you're missing.

 

[wwu123]

Are any of you all planning to submit for the tax incentives on form 5695 Residential Energy Credits when filing your 2023 tax return? TMC has the most energy-minded cool people on Earth, so I assume ya'll are trying to take advantage of these credits. Plus we all love to save money right? Yeahhhhh. For 2023 it seems qualifying energy home improvements can get $600 tax rebate regardless of your income.

Unfortunately, I can't find a CPA for broke-azz losers like myself who will discuss the new rules for a regular 1040 married filing jointly middle-class tax submission. I'm not going to pay hundreds in consulting fees to a high end CPA at some expensive wealth management shop. And the churn and burn CPA's just have a blank look when I bring this up. So I'll consult with you all experts instead (eg: @Redhill_qik and @miimura ).

On this form 5695 under the Part II IRA's Energy Efficient Home Improvement Credit there's a "Smart Worksheet". One of the items in this section is for windows and skylights that meet or exceed the version 6.0 Energy Star Program Requirements.

The thing I want to confirm is that all I need to do is identify that the installed windows or exceed the v 6.0 criteria for the specific geographic area of the installation. So, if the product beats the number on the Energy Star thing, then I'm fine slamming the investment $ in that 5695 form. Then taxpayers will help pay for my baller ass windows. Then for 2024, I'll get a new front door and clip another $600 on a qualifying door.

For example, I'm in the South-Central Energy Star Zone (just East of the San Francisco Bay Area). This means the U factor has to be less than 0.30 and the Solar Heat Gain Coefficient (SHGC) should be < 0.25. The windows I installed are Anlin Del Mar Single Slider SunMatrix Argon without Grids. Their rated spec sheet is a U Factor of 0.26 and a SHGC of 0.17.



Snippet from IRS From 5695

About Form 5695, Residential Energy Credits | Internal Revenue Service

Information about Form 5695, Residential Energy Credits, including recent updates, related forms and instructions on how to file. Use Form 5695 to figure and take your nonbusiness energy property credit and residential energy efficient property credit.

www.irs.gov

View attachment 1016752



Snippet from Energy Star Requirements V6

https://www.energystar.gov/sites/default/files/Windows_Doors_and_Skylights_Program_Requirements%20v6.pdf

View attachment 1016756



Snippet from the Anlin Del Mar Spec Sheet with red arrows pointing at what I think the EPA measures:

https://anlin.com/wp-content/uploads/2019/12/DelMar_Performance_Data.pdf

View attachment 1016763


Here's my previous thread where I discuss the $600.

Inflation Reduction Act Tax Incentives for Energy (not related to PV+ESS and EVs)

I've been researching some of the energy-related tax incentives in the latest Inflation Reduction Act (IRA). While I am clearly an idiot (have you read my posts on TMC? they're usually just me ranting about PG&E sucking or talking about blade disconnects), I figure it could be useful to share...

teslamotorsclub.com

PS: SGIP is still 1000x more difficult to get than this tax incentive. Those mf-ers send people to your house to take pictures of your install and ask you to turn on ever electrical load in your house to prove your sustained kW consumption. Sheeeesh.

Based on research into qualified heat pumps, I think you're good (*I'm a layman, not tax adviser). But if you want to be thorough in your due diligence, a few things I saw on Windows, that are analogous to mine on Heat Pumps:
-it can be hard to find what is the most current Energy Star guidelines, for windows it's actually at least 7.0, which is why you showed later it's actually 0.28 and 0.23 for South-Central (which are the tightened values for 7.0 over 6.0.
-the Energy Star label is the easy way to verify, and of course the EPA Energy Star site always states broadly, but perhaps inaccurately, that ONLY products with the Energy Star label qualify for the tax credits
-but there is often a years-long lag between product certifications (by industry, I don't think the EPA tests anythign themselves) and getting the labels, especially when the EPA updates their guidelines,
-hence I noticed the IRS usually has careful/awkward language that usually does not state simply that the product must be "Energy Star certified" or "certified by Energy Star". For windows it actually states products "that meets the Energy Star certification requirements" and further that "you may rely on a manufacturer's certification in writing".

That said, the 3-page Anlin download is broad per product family/type, the Jeld-Wen (my house windows) 10-page equivalent of that says the values are represntative and vary by specific options. I think the window certifications are actually the NFRC certification labels you see on every non-custom window, before you or your contractor peel off the protective films - since you probably don't have them, you can also find the certificates here:

Certified Product Directory | National Fenestration Rating Council

If you thought the AHRI directory for heat pumps was tough, there are 710 different non-searchable certificates for the Del Mar line once you narrow down. But there's a button to download the entire list to a CSV file which you can then sift through in Excel pretty easily by your options - Argon vs Air, grid vs no-grid. Then once you find the corresponding one, you can look at the CPD# and go back to the directory to download the cert data. LIkely you're all good as the Anlin perf data sheet suggested....

 

[holeydonut]

Does your label say most efficient?

That seems to be the critical part that you're missing.

The windows had the sticker with the u factor and SHGC. Which is why I cross referenced those values against the V6 requirements.