Master Thread: Energy products and Tax discussions

[willow_hiller]

The general consensus was "installed and functional" (so yes, when its put on your roof and able to be turned on).

For what this is worth, the federal Office of Energy also agrees.

Found this the other day when searching for an authoritative source to answer this question: Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics

The system must be placed in service during the tax year and generate electricity for a home located in the United States. There is no bright-line test from the IRS on what constitutes “placed in service,” but the IRS has equated it with completed installation.

 

[tfan2018]

This point has been discussed on this board and I'll reiterate my position.

Don't wait for demand side incentives to make a purchase. Tax credits such as the ITC simply allow the supplier of the goods or service to raise prices commiserate with the incentive. If you were willing to pay $20k for a system before a 30% credit you'll be willing to spend $28.6k with the credit and those selling systems know this. Your net outlay will likely be the exact same regardless of the incentives provided by local or federal governments.

@KHYE you may have a very unique situation if you can guarantee pricing and the delayed install on the chance of an ITC extension. My comment here is for those that are thinking of waiting months or years.

Agree with the part on raising prices. Just look at model 3 this year… $7k price increase vs expected $10k govt incentives

 

[sunwarriors]

I think the risk of NEM3.0 vs. this lower possible tax thing is not worth the risk. As mentioned, there are a lot of moving parts and a lot of players in getting you installed and fully PTO. I keep hearing PG&E is the worst from here and if you're in that area, say if you want Powerwalls and now, the city won't permit them due to that law not allowing it in a garage, back to the drawing board or you have to put them outside or find another location. With Tesla Solar, maybe that's another 2 months in your project.

I got my PTO recently and with all the delays we're seeing, was 'ok' losing that extra 4%. A simple part delayed my install by 1 month alone.

Some folks here talk about their 6+ months PTO and there is still no written in stone what will happen when NEM3.0 is agreed on. Maybe there is a grace period, but if there isn't since we all know the IOU (investor owned utilities) probably want the shortest time possible, your longer term cost with minimum fees is going to cost you a lot more than that 4% probably.

Remember that they were crazy enough to try to rip up all NEM1.0/2.0 grandfathering so who knows what they say when NEM3.0 is finally published.

This supply chain problem is also not going away soon and I've read installs and solar panels have gone up in prices in the few months since I purchased my stuff. We all know about Tesla MY/M3 price increases already. Also, any disagreement/conflict issue with China (Taiwan?) is going to have large issues thoughout the world/economy. I've stated before, but I'd run to try to get an installer scheduled since they sound like they're massively backed up already.

Like others have mentioned, if an installer has tons of jobs, they may simply charge more for future jobs since they don't really have the labor as it is so might as well charge some marked up price since all their teams are busy already...that might be more than the 4%.

 

[tfan2018]

Also factor in the # of months you're delaying your installation. The earlier you install solar, the sooner you'll start saving on energy costs.

 

[KHYE]

Agreed with everyone that 4% difference is not a big deal in terms of the big picture. I'm just hoping my roof replacement cost can get ITC after the bill.

 

[holeydonut]

This may change with NEM 2 to NEM 3, but I can tell you 100% that adding "storage only" to an existing NEM agreement did not require moving to a new NEM agreement.

My source is myself, with 2 powerwalls added to existing solar that was (and still is) under NEM 1.0. There was a specific form I signed for adding storage to an existing NEM agreement.

This may change (and my bet would be that the utilities would build that in there), however I dont think its set in stone as there is precedent that adding paired storage does not force being moved from NEM 1 to NEM 2.

IMO, I think you got lucky and snuck in with your install... I don't think PG&E, SCE, or SCG&E will be so accommodating today (or especially in the few months right before NEM 3.0). The PoCos don't seem like the kind to folks to let additional export potential show up without a new PTO agreement. Of course, that's only if someone bothered to alert them about it...

The PG&E NEM-Paired-Storage PTO agreement I got forced down in 2020 had a bunch of new line items and extra red tape that even companies like Sunrun were confused by. Their PTO expert person at Sunrun that I got in touch with said they were surprised I took the time to read my PTO agreement. They've been using the same cookie-cutter agreement for so long for Sunrun's LG Chem stuff. They didn't realize there were so many new requirements for disclosure, reporting, and fees from PG&E for ESS interconnect.

 

[holeydonut]

For what this is worth, the federal Office of Energy also agrees.

Found this the other day when searching for an authoritative source to answer this question: Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics
The system must be placed in service during the tax year and generate electricity for a home located in the United States. There is no bright-line test from the IRS on what constitutes “placed in service,” but the IRS has equated it with completed installation.

Correct me if I'm wrong, but I'm under the impression the system likely also needs a payment/billed invoice in a particular tax year to qualify. Companies processing ITP through Safe Harbor provisions can probably show incremental work in progress leading up to the full value of the claimed credit. But residential homeowners are basically looking at a singular discrete payment, and individuals don't seem eligible for work-in-progress assessments of a product installed in one tax year but paid for in another.

And to my understanding, residential installers only accept payment after PTO.

Sunrun let me pre-pay in December 2020 without PTO since the whole thing was FUBAR anyway; they figured it would at least help me lock in the 2020 ITC even if Trump won. But they did a special accommodation for me and I don't see that as good advice for others. I had the working solar + batteries + cash payment all processed so I could produce data if audited (PTO wasn't granted by PG&E until March 2021).

I just don't think it's wise for customers to break normal protocol since they lose a lot of consumer protections in the process. Imagine if PG&E absolutely refused to grant me PTO because I couldn't find an insurance company willing to name them as an insured on my home policy. I'd have been out a crap ton of money for a system I couldn't use on-grid.

 

[willow_hiller]

And to my understanding, residential installers only accept payment after PTO.

I don't know if it's still the case, but when my system was installed last year, Tesla required payment after the permit inspection was completed, but before PTO was granted.

 

[KHYE]

I don't know if it's still the case, but when my system was installed last year, Tesla required payment after the permit inspection was completed, but before PTO was granted.

Yes, they stated payment is due within 5 days after inspection in the purchase contract. They want payment before PTO.

 

[holeydonut]

Ok cool, it seemed somewhat inconsistent for the people in the "where o where has my PTO gone" thread. It seems some paid $ in full and were just left bag-holding for months without PTO. But some others had only paid a down-payment after inspection, with full payment coming later.

I just hope homeowners don't get slow-rolled by the utilities since now they're incentivized to delay PTO as much as possible. Like I want to believe that a NEM 2.0 application will be allowed to go through to completion even if NEM 3.0 goes into effect. But this is PG&E we're talking about. They make a habit of murdering people and shrug it off. I can picture the angry TMC posts appearing here... where someone has a inspected system in one month, but PTO doesn't happen until many weeks later after NEM 3.0 goes into effect and the PoCo disallows NEM 2.0.

 

[power.saver]

IMO, I think you got lucky and snuck in with your install... I don't think PG&E, SCE, or SCG&E will be so accommodating today (or especially in the few months right before NEM 3.0). The PoCos don't seem like the kind to folks to let additional export potential show up without a new PTO agreement. Of course, that's only if someone bothered to alert them about it...

The PG&E NEM-Paired-Storage PTO agreement I got forced down in 2020 had a bunch of new line items and extra red tape that even companies like Sunrun were confused by. Their PTO expert person at Sunrun that I got in touch with said they were surprised I took the time to read my PTO agreement. They've been using the same cookie-cutter agreement for so long for Sunrun's LG Chem stuff. They didn't realize there were so many new requirements for disclosure, reporting, and fees from PG&E for ESS interconnect.

It wasn't luck. Both @jjrandorin and I have the exact same situation. I added 2 PW to an existing solar system on NEM-1 and it was approved and there was no change to NEM-2 because this is explicitly allowed by SCE.

 

[holeydonut]

It wasn't luck. Both @jjrandorin and I have the exact same situation. I added 2 PW to an existing solar system on NEM-1 and it was approved and there was no change to NEM-2 because this is explicitly allowed by SCE.

Lucky bastard... you don't have to deal with PG&E.

 

[jjrandorin]

Lucky bastard... you don't have to deal with PG&E.

SCE does seem to be "slightly" better than what some report PGE doing, even though they seem to be aligned on most things.

 

[Mj23lebron6]

Hello Tesla Family,

I recently got a solar roof installed in Northern California. It’s been 7 weeks and the inspection hasn’t been done. Does the system have to be turned on for me to receive the tax credit for 2021? Or will I have to wait till 2022 to claim the tax credit when solar is in service?

I called tesla and they said it should be based on when the system was installed but I’m not entirely sure.

Any help would be greatly appreciated.

 

[holeydonut]

Hello Tesla Family,

I recently got a solar roof installed in Northern California. It’s been 7 weeks and the inspection hasn’t been done. Does the system have to be turned on for me to receive the tax credit for 2021? Or will I have to wait till 2022 to claim the tax credit when solar is in service?

I called tesla and they said it should be based on when the system was installed but I’m not entirely sure.

Any help would be greatly appreciated.

Have you paid yet? I think the easiest/proof of a normal residential system being "completed" is the date of receipt of your money or loan activation. I know the tax laws can get really fuzzy, but it seems for most people the payment date is usually a good measuring stick.

 

[Mj23lebron6]

I can’t pay unless inspection is completed. It’s been 7 weeks and I’ve still been waiting for the inspection to be scheduled.

Btw thanks for responding! Super appreciate it

 

[h2ofun]

My tax guy said it is when you paid for it. That is what taxes are, what you use money for in the year. I have had cases where I paid for things that were not done just so I could write them off in that year.

 

[tfan2018]

My invoice date was in 2021 but I made payment in 2022. System has PW and it is in self consumption mode since Oct. Can I still claim the tax credit for 2021?

 

[h2ofun]

My invoice date was in 2021 but I made payment in 2022. System has PW and it is in self consumption mode since Oct. Can I still claim the tax credit for 2021?

My tax guy always said when the check was paid with date, so always made sure I paid before Dec 31th, even if not done

 

[ucmndd]

My invoice date was in 2021 but I made payment in 2022. System has PW and it is in self consumption mode since Oct. Can I still claim the tax credit for 2021?

I’m in a similar situation, my PWs were installed mid December, passed inspection shortly thereafter, and have been doing their thing since then.

My installer is slow walking the interconnection application / PTO and project close out, so I’ve thus far refused to pay as the checkbook is the only leverage I have at this point.

I found this flyer on the energy.gov website:

https://www.energy.gov/sites/default/files/2021/02/f82/Guide%20to%20Federal%20Tax%20Credit%20for%20Residential%20Solar%20PV%20-%202021.pdf

Relevant section:

So, I intend to claim on my 2021 taxes. If by some stretch I get audited, I guess we’ll see how it goes. Since the tax credit is the same for 2021 and 2022 I can’t imagine anyone making a particular stink about this, but you know, government and all…

…aaaand I just looked upthread and noticed this exact info has already been posted. So if TWO people on the internet say the same thing, it’s obviously true.