New Solar Roof owners - how much can we write off in taxes?

[jboy210]

Telsa is now telling me that since sola roof is an integrated system you can take the tax credit on the entire system. So if you did have 1 active solar tile you could get away with it, but I don't think tesla would ever approve of that design.... a stretch but may work for IRS? my contract docs states everything solar...

Solar Roof Tiles Materials
Solar Roof Tiles Labor
Solar Roof System Material (25.025 kW)
Solar Roof System Labor (25.025 kW)

Wow. That would be wonderful. May I need to file an amended return to pick up a huge tax credit?!!

 

[cobra]

I noticed that the solar roof estimator is now showing a much larger install of solar roof tiles than several months ago. I don't know better, but it almost appears that they are offering to install all active tiles on our roof rather than having any (or larger sections) of inactive roofing. For about 2300 Sqft, they are now quoting 23kW of solar roof, where before it was more in the 16kW range, if I recall. It almost seems like they might have looked at the difficulty and cost of the new passive metal tiles and decided it was cheaper (maybe because of tax credit) to go as much active tile as possible? Or it's an estimator bug...

 

[Sake7]

That is certainly a different position than they used to take. I would feel like it is a bit of a stretch for exactly that 1-tile extreme example (and I did not claim my entire roof, based in part on what Tesla was advising at the time) but I would certainly be more comfortable if Tesla and a tax professional directly responsible to me signed off on it. At the least, in the event of an audit, you would be able to argue that your position was taken in good faith.

I do wish Congress would clarify some of this - in the case of solar shingles, something along the lines of stating it is entirely creditable if at least 50% of the surface area is PV, or something similar, might cover it.

Tesla's argument is that since their solar roof is an integrated system, even inactive parts help route the cabling, so the entire system is able to be written off...

 

[wjgjr]

Tesla's argument is that since their solar roof is an integrated system, even inactive parts help route the cabling, so the entire system is able to be written off...

I get the argument of it being an integrated system, though this is not what Tesla was saying about the same product as recently as a year ago. I do not know what prompted the change - whether it was simply an internal reassessment or some guidance from the IRS - but it is a change. And, again, it potentially stretches the limits of the credit. While the one tile example is an absurd extreme, another example would be where not all roof planes have solar - such as a home with north/south roof sections. The north face might have no solar (and no cables.) Should only a roof face with at least one PV tile be counted? What if (as in my roof) there is a smaller, lower roof section that has no PV but I wanted to still look the same as the rest of the roof.

My point is not to say this new position is wrong (and it might even be that Tesla accounts for some of the above as well.) It is just that this is a more aggressive position which might also increase the chances of conflict with the IRS.

 

[jboy210]

I get the argument of it being an integrated system, though this is not what Tesla was saying about the same product as recently as a year ago. I do not know what prompted the change - whether it was simply an internal reassessment or some guidance from the IRS - but it is a change. And, again, it potentially stretches the limits of the credit. While the one tile example is an absurd extreme, another example would be where not all roof planes have solar - such as a home with north/south roof sections. The north face might have no solar (and no cables.) Should only a roof face with at least one PV tile be counted? What if (as in my roof) there is a smaller, lower roof section that has no PV but I wanted to still look the same as the rest of the roof.

My point is not to say this new position is wrong (and it might even be that Tesla accounts for some of the above as well.) It is just that this is a more aggressive position which might also increase the chances of conflict with the IRS.

Since a solar roof is a series of interlocking tiles, one could argue that if you have active tiles on that section of the roof you can write it off. For example, we have active tiles on all of the planes of the roof. There are six such planes since our roof is simple. And this includes both North and South facing planes of our roof. I am wondering if I should amend last year's return to take credit for the cost of all of these.

 

[wjgjr]

Since a solar roof is a series of interlocking tiles, one could argue that if you have active tiles on that section of the roof you can write it off. For example, we have active tiles on all of the planes of the roof. There are six such planes since our roof is simple. And this includes both North and South facing planes of our roof. I am wondering if I should amend last year's return to take credit for the cost of all of these.

I agree the argument is strongest where everything is on the same plane, though there is still a question of whether it qualifies just because it happens to be part of what Tesla might call a system. Taken to an absurd level, if Tesla designed modular homes around its solar/battery product, that wouldn't mean the entire home is creditable. In the end, we have what the IRS and tax professionals make of the applicable code, which is essentially:

(d)(2) Qualified solar electric property expenditure
The term “qualified solar electric property expenditure” means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer.

and

(e)(2) Solar panels
No expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (1) or (2) of subsection (d) solely because it constitutes a structural component of the structure on which it is installed.

26 U.S. Code § 25D - Residential clean energy credit

www.law.cornell.edu

The second piece makes it clear that the inactive tiles would not be excluded simply because they serve a structural purpose (as a roof.) But the question of whether they are "property which uses solar energy to generate electricity" is one I'm not sure has been explicitly addressed by the IRS. (I would love to see somebody get a private letter ruling from the IRS, similar to the PW one, to at least give some indication of how they view this.)

There is an IRS FAQ as well:

Q. Is a roof eligible for the residential energy efficient property tax credit?​

A. In general, traditional roofing materials and structural components do not qualify for the credit. However, some solar roofing tiles and solar roofing shingles serve as solar electric collectors while also performing the function of traditional roofing, serving both the functions of solar electric generation and structural support and such items may qualify for the credit. Components such as a roof's decking or rafters that serve only a roofing or structural function do not qualify for the credit.

But, even this doesn't really answer the question. "Traditional roofing materials" do not qualify while "solar roofing tiles and solar roofing shingles" do. But, is a non-producing tile/shingle part of the former or the latter? It is traditional in the sense that - particularly with the update - it is just metal roofing. But, it is designed specifically to work with the solar tiles and may, in some cases do things like covering/routing the cabling, so maybe it would, even if it is not a "solar electric collector."

It does seem, however, like the IRS does not recognize a notion of a "system" so I don't think one could solely rely on the idea that the pieces are all designed to be integrated in order to claim the full credit.

 

[Sake7]

The quote I got for a solar roof is pretty shady in that it calculates the potential tax credit as applied to the entire system price.

125,200 * .26 = 32552.

They even rounded up by the next 100 dollars to make it look more enticing.




View attachment 713705

Wow tesla just reduced my estimate system design cost by 30k not pre incentives in the solar roof.

Now it's much more competitive with standing seam solution...

 

[jboy210]

... But, even this doesn't really answer the question. "Traditional roofing materials" do not qualify while "solar roofing tiles and solar roofing shingles" do. But, is a non-producing tile/shingle part of the former or the latter? It is traditional in the sense that - particularly with the update - it is just metal roofing. But, it is designed specifically to work with the solar tiles and may, in some cases do things like covering/routing the cabling, so maybe it would, even if it is not a "solar electric collector."

It does seem, however, like the IRS does not recognize a notion of a "system" so I don't think one could solely rely on the idea that the pieces are all designed to be integrated in order to claim the full credit.

I would argue that the non-producing sections of the roof (non-active tiles and metal edgings) are unique to the solar roof and serve as mounting and other necessary hardware for the active sections. Each tile connects to its neighbor by clicking in like lego blocks regardless if that tile is solar producing or non-producing. And you cannot use any standard components available from general roofing suppliers for this purpose or the pre-fabricated and matched to tile-size edgings.

 

[wjgjr]

I would argue that the non-producing sections of the roof (non-active tiles and metal edgings) are unique to the solar roof and serve as mounting and other necessary hardware for the active sections. Each tile connects to its neighbor by clicking in like lego blocks regardless if that tile is solar producing or non-producing. And you cannot use any standard components available from general roofing suppliers for this purpose or the pre-fabricated and matched to tile-size edgings.

I think it is a plausible argument and might win the day. On the other hand, the code does not provide any language that has an exception for something being unique, and the logical extension of this would be that if the entire house was designed with some proprietary lego-like connectors, this would allow the entire structure to be creditable. So, there has to be some limit, and it will be interesting to see where the IRS comes down on that.

 

[jboy210]

I am trying to find out if anyone has filed or plans on filing for a write-off for the entire cost of their solar roof.

We are meeting with our accountant in a week or two and I want see if others have had success with this.

 

[83girl]

I am trying to find out if anyone has filed or plans on filing for a write-off for the entire cost of their solar roof.

We are meeting with our accountant in a week or two and I want see if others have had success with this.

I did my taxes with HR Block. They wrote off the entire solar roof and powerwalls. They are the ones who signed it, so there you go. If they are wrong, it's on them.

 

[slcasner]

I did my taxes with HR Block. They wrote off the entire solar roof and powerwalls. They are the ones who signed it, so there you go. If they are wrong, it's on them.

If your return is audited and the IRS does not allow the full amount of the credit I'd be extremely surprised if HR Block would pay the difference. I'm pretty sure they never make a guarantee like that. Depending upon what services you paid for, they might be obligated to represent you in the audit, but ultimately the tax obligation is on you.

 

[SaveOurPlanet]

I am trying to find out if anyone has filed or plans on filing for a write-off for the entire cost of their solar roof.

We are meeting with our accountant in a week or two and I want see if others have had success with this.

I've been thinking of the same thing and there is no easy answer. Tesla used to suggest for my installation an amount that is 10K over the solar glass+PWs but not quite the complete installation. There is no itemization of what is deductible before, and today Tesla is saying your whole amount is possibly deductible but your tax accountant has to verify that. There is no tax accountant that can verify that since Tesla does not even break out what is what. I've decided to deduct the whole installation simply because IRS may ask me to explain either way, they may have to go to Tesla for explanation since there is no clear document stating what is what. So if I misunderstood what is what then I will pay the interest. Of course it would be more clear if "Raise the roof bill" is passed.

 

[83girl]

If your return is audited and the IRS does not allow the full amount of the credit I'd be extremely surprised if HR Block would pay the difference. I'm pretty sure they never make a guarantee like that. Depending upon what services you paid for, they might be obligated to represent you in the audit, but ultimately the tax obligation is on you.

Oh no doubt. I figure HR Block doesn't want to have its customers audited, and less wants to have to represent them in an audit, so it's in their best interests to get it right. I did pay extra for that service, so we will see how it plays out. I forsee that the IRS won't be bothered to go to Tesla to get a breakdown.

 

[83girl]

Oh no doubt. I figure HR Block doesn't want to have its customers audited, and less wants to have to represent them in an audit, so it's in their best interests to get it right. I did pay extra for that service, so we will see how it plays out. I forsee that the IRS won't be bothered to go to Tesla to get a breakdown.

• Solar PV panels or PV cells used to power an attic fan (but not the fan itself)
• Contractor labor costs for onsite preparation, assembly, or original installation, including permitting fees, inspection costs, and developer fees
• Balance-of-system equipment, including wiring, inverters, and mounting equipment
• Energy storage devices that are charged exclusively by the associated solar PV panels, even if the storage is placed in service in a subsequent tax year to when the solar energy system is installed (however, the energy storage devices are still subject to the installation date requirements)
• Sales taxes on eligible expenses

 

[cobra]

• Solar PV panels or PV cells used to power an attic fan (but not the fan itself)

Err, not the house, just an attic fan?

 

[83girl]

Err, not the house, just an attic fan?

I think this means if you purchase an attic fan, you can't deduct the cost of the fan. Not sure what an attic fan is to be honest.

 

[charlesj]

I think this means if you purchase an attic fan, you can't deduct the cost of the fan. Not sure what an attic fan is to be honest.

Could be either a whole house fan or just a fan to ventilate the attic to cool it down most likely.

 

[Penny24]

This is true and I asked my tax person about the write off last year. He said the write off is 26% of the total solar project cost. If I knew this was the case I would have added a 3rd battery...

 

[CrazyRabbit]

I did my taxes with HR Block. They wrote off the entire solar roof and powerwalls. They are the ones who signed it, so there you go. If they are wrong, it's on them.

No it isn't! perhaps the IRS will not hit you with penalties, but they will get you for interest.

i got a idea, i will have a contractor that installs solar build my next house and write off the whole house! NOT. IRS has made it clear that shoring up the roof or new roof is not a solar expense.

now i don't think the IRS gives a rats a$$. so don't worry, the only thing they will look for is the transaction or loan. transactions larger then 10k are reportable...