We have, so I won't go into too much detail other than to disagree that there is a 100% shift to benefit only suppliers. They clearly get a benefit, but not 100%. That said, as the industry matures, I think they will be able to capture more of the benefit, which is why I feel like the past benefits of the ITC in encouraging innovation in the sector may not be replicated with a long extension of it. So I definitely agree that there are better ways to spend the money. (And, when you get right down to it, the more cost-effective solution likely would focus on the commercial side and utility-scale solar/renewables.)@wjgjr I know we've had this discussion on the other thread
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Master Thread: Energy products and Tax discussions
- Thread starter jjrandorin
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- tax tax credit
My thoughts are, it seems to me that you are confusing a "tax credit" with something that it is not, which is a discount or a rebate. The tax credit is something you apply for on your own taxes. Its not a rebate, it is not a discount.
You "qualify for it or not" depending on your tax liability, depending on the tax rules in place in the year you install. Tax credits have nothing to do with a discount on energy storage, other than it would encourage tesla (and other providers) to NOT discount the price, because they will say "you are getting this money as a rebate later, that is your discount" (in a much much nicer way).
In my opinion this wont change powerwall pricing, or if it does, the powerwalls will get approximately 4% more expensive so that tesla attempts to capture that "tax credit" themselves. There are other thread on that discussion as @wjgjr and @gpez state, so not going to go into that here, except to say that it appears to me that you are confusing a tax credit with a rebate.
To answer your original question, if the change takes place in the tax year you install, then you would get whatever tax credit you qualify for. There will be zero change in your billed price regardless of this law or not.
Sorry I searched for threads with mentions of the new proposed GREEN Act and nothing came up.
There is still so little coverage on the actual contents of the bill that’s why I was asking if anyone knew anymore details about it.
For example, one of the articles I quoted says that the tax credit would be retroactively applied to anyone who installed panels starting 2020, which is different than what people are saying here, namely that it would take affect starting the tax year that it gets passed in.
Secondly, I’m not trying to guess whether Tesla would or would not increase the price of the Powerwalls as a result of the passing of this bill. My question is if the bill passes as-is, I would be able to apply for an additional 30% of tax credit off the price of my installed Powerwalls? Thanks.
There is still so little coverage on the actual contents of the bill that’s why I was asking if anyone knew anymore details about it.
For example, one of the articles I quoted says that the tax credit would be retroactively applied to anyone who installed panels starting 2020, which is different than what people are saying here, namely that it would take affect starting the tax year that it gets passed in.
Secondly, I’m not trying to guess whether Tesla would or would not increase the price of the Powerwalls as a result of the passing of this bill. My question is if the bill passes as-is, I would be able to apply for an additional 30% of tax credit off the price of my installed Powerwalls? Thanks.
The first link you provided says it applies "for projects that begin construction after 2020 and before 2027." So I'm not sure if it would be retroactive to 2020, or if "after 2020" means 2021. If it were to be retroactive to 2020, and assuming it is not implemented before we file our taxes, those of us with 2020 installs would likely need to file some sort of amended return to get that extra 4%. To be honest, even though it would be a bonus for me, making it retroactive to 2020 would be stupid since customers agreed to their purchases under known pricing/credit conditions (but, as I mention above, there is precedent for this stupidity in how they extended the energy efficiency credit.) To be clear, Congress could pick any day they want - it does not even have to be the beginning of the year - though for ease of implementation, it seems like they generally align it with one.
For the PWs, I am almost certain it would not be an additional 30%. All it would likely do is codify that PWs do, in fact, qualify for the ITC, where right now, the law is silent on the point and we are all relying on an unofficial IRS interpretation. So, it would help provide some certainty for PWs and, depending on the exact wording, potentially expand the allowed use of a qualifying PW, but it would still be a single 30% credit under the revised ITC.
Thanks. I think I know what you are getting at. Currently if you go to the order form of Tesla Solar, add your solar panels and Powerwall, their 26% federal tax credit calculation includes the cost of the Powerwall already.
It is tax time. I want to get the numbers in soon so my accountant can figure how much we owe.
Tesla gave us an estimated credit so we can just go with that, it is about 20.5% of the total cost, so pretty good. But I was thinking about working the numbers to see if I can do better.
With the SolarRoof we have a mixture of non-solar producing and solar producing tiles. And the non-producing tile costs would not be eligible. Also, we have Powerwalls, TEG, inverters, and associated installation which I assume are fully eligible.
Am I thinking about this correctly? Am I missing any items?
Tesla gave us an estimated credit so we can just go with that, it is about 20.5% of the total cost, so pretty good. But I was thinking about working the numbers to see if I can do better.
With the SolarRoof we have a mixture of non-solar producing and solar producing tiles. And the non-producing tile costs would not be eligible. Also, we have Powerwalls, TEG, inverters, and associated installation which I assume are fully eligible.
Am I thinking about this correctly? Am I missing any items?
Silicon Desert
Well-Known Member
Hmmm, good question. I think I am still in the same "financial boat" as you, meaning I itemize and have a lot of things to deduct. I was able to get credits on my total installation 3 years ago. Not sure if that has changed or not since then. I don't have roof tiles. I have solar modules, inverter, and a powerwall on the home that I made that deduction on. Let's hope you get the max.
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aesculus
Still Trying to Figure This All Out
I am not sure this is completely true. I think a case can be made in many installations that all the solar roof elements are deductible.
If you consider the solar roof as a system, then you cannot have the producing tiles without the non producing tiles. But I can certainly see where if most of your roof is non producing you would have trouble justifying that claim.
Silicon Desert
Well-Known Member
Yes, that is what I was thinking, but you say it better.
Frankly, the IRS wouldn't know or differentiate what is producing or not.
Likely they would not.
But after doing a lot of reading of invoices I did find where Tesla called out the costs for the portion of the roof that is non-producing. So we will take 26% of everything except this portion. It reduces the tax credit by about $2,500. But I am OK with that to avoid an issue with the IRS and potentially another audit.
This is exactly why all elements are not deductible - because otherwise, one could install an entirely new roof with one (integrated) module and claim the credit. In fact, there is special language in the code (which often trips people up because it ends up using double negatives) just to clarify that solar shingles qualify since they could be seen as a loophole themselves as the government is effectively subsidizing not just the PV functionality of the shingle but also the roofing aspect. So, in that respect, those of us with a roof are already getting a good deal in that part of our roof (but not all) is covered by the credit.
So, to answer the original question, we will go with Tesla's allocation for the roof which clearly indicates the costs for the PV portion (eligible) and non-PV portion (ineligible.) And, the PW cost (eligible) is also broken out. The only piece that Tesla marks ineligible (or, more precisely, does not mark eligible) is the "Permitting, Roof Prep, and Pre-Construction" line item, as this roughly matches at least what the energy department considers eligible costs ("Contractor labor costs for onsite preparation, assembly, or original installation, including permitting fees, inspection costs, and developer fees" - https://www.energy.gov/sites/prod/f...deral Tax Credit for Residential Solar PV.pdf) and the gutter and repair work (which are not eligible) are separate line items.
One other note is that any discounts Tesla provided (such as the discount for buying PWs at the same time) would need to be subtracted out from the claim. However, if it is a general discount (as mine is listed,) it seems like it can be prorated. So, if you had a $10k contract with $7k of creditable expenses and $3k not, and Tesla gave you a $1k discount (so you actually paid $9k) you would need to reduce the ITC claim from $7k to $6.3k. (Also, any state/local/utility incentives need to be accounted for, though the rules vary.)
aesculus
Still Trying to Figure This All Out
Well this could get confusing for sure. Here is the estimate Tesla provided me for my Solar Roof. Note it certainly does not cover my entire roof and the producing tiles is roughly half of the total cost. What is not clear is where the inverter and installation costs are. Plus you would have to figure in the tear off costs, and electrical work in the mix which are not called out separately on the invoice.
So by Tesla's view I would take the amount for the full purchase.
So by Tesla's view I would take the amount for the full purchase.
For me, the breakout was on page 4 of my solar roof purchase agreement. The "System Price Sheet" on that page has two line items, one labelled "Solar Roof (2995.158 square feet)" and another labelled "Solar Roof (9.940 kW)". Each of those lines has a separate price. I'm assuming the kW line is the price of the active PV tiles that are FITC eligible.
In fact, just noticed the kW line item has a footnote that states "These costs may be eligible for a U.S. federal personal income tax credit ..."
In fact, just noticed the kW line item has a footnote that states "These costs may be eligible for a U.S. federal personal income tax credit ..."
I would expect Tesla to provide something more detailed. In our case, the purchase agreement included something like the following:
- Solar Roof
- Solar Roof (x square feet)
- Solar Roof (y kW)
- Powerwall
- z Powerwalls
- Powerwall Supporting Hardware
- Powerwall Installation
- Pre-Construction
- Permitting, Roof Prep and Pre-Construction
- Electrical Upgrades
- Roof Deck Replacement
- Alternative Roofing
- Gutter Replacement
Looking at the screenshot you posted, and assuming it is based on a 26% ITC, then it seems like Tesla thinks about $14,700 of the project is eligible. (It would be more if the estimate was based on 22%.)
aesculus
Still Trying to Figure This All Out
It was late last year so the ITC was 26%? So I guess the number that Tesla calculated is way more complicated than just taking the amount that has kW on it. In my case the costs were fairly evenly split so the credit at 26% was not based solely on the kW portion.
My details only have two items (Solar Roof (sq ft) and Solar Roof (kW). My Powerwalls were installed the year before against another preinstalled solar system.
So I am going to take the amount that Tesla indicated and then fight later if challenged.
Another FWIW:
Further down on my purchase agreement this appears:
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The ITC was 26% last year. It was scheduled to drop to 22% this year before Congress extended the 26% through the end of 2022. So, it is possible that Tesla provided some estimates at 22% if it was expecting a 2021 install and before the extension was enacted. In your case, based on the bit you quoted matching the $14,700 number I mentioned, it seems it was 26% that Tesla used. Without seeing the full agreement, I do not know how it was calculated, but I can say that the estimates Tesla originally provided me seemed to match the kW number + the PW number (ours were installed together.)
And that last bit you quoted is essentially Tesla's way of saying "don't come to us if you get audited." Since this is a complex project with parts that are creditable and parts that are not, there is not a perfect answer (as, for example, the crew on site certainly did not track every minute of work on PV shingle install vs. non-PV shingles - instead it is an estimate based on Tesla's knowledge of the material and labor costs.) However, the nice thing about using Tesla's numbers is they do seem reasonable, and you have some backup documentation in the event of an audit, where if you make your own estimate, you don't have that (and likely don't have the detail from Tesla to make another allocation.)
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