Powerwall eligibility for ITC when installed after solar

[MajorCuddles]

Has anyone seen this post make the news in the blogs?
The IRS provided a response to an individual taxpayer that, given certain configuration considerations, a Powerwall Installation which integrated with an existing PV installation is eligible for the ITC.

The battery characteristics described in the letter seem to be spot on for a Powerwall 2.

Was this common knowledge? The blog post seemed to imply that this was 'news'...

 

[liuping]

Was this common knowledge? The blog post seemed to imply that this was 'news'...

It's been that way for a while. You get the 30% of the installation cost tax credit for batteries added later reduced by the percentage they are charged not charged with solar. Charge them 100% from solar, you get the full 30% credit. Charge them 100% from he grid and you get no credit.

 

[miimura]

This actually is news because it was just issued this month and it is the first private letter ruling I've seen based on the residential ITC section 25D. The 2012 private letter ruling that has been referenced in this forum before is based on Commercial ITC. It should be noted that this new ruling requires the battery be charged 100% by solar. The commercial ITC allows as little as 75% solar charging with the ITC pro-rated between 75% and 100%.

 

[MorrisonHiker]

It's been that way for a while. You get the 30% of the installation cost tax credit for batteries added later reduced by the percentage they are charged not charged with solar. Charge them 100% from solar, you get the full 30% credit. Charge them 100% from he grid and you get no credit.

Do you know if we'll be able to set the Powerwalls up to charge from both the grid and solar? We'll be getting our Powerwalls for free from the referral program, so we won't be getting any ITC on the Powerwalls themselves. We have a TOU plan and it would be nice if we could charge the Powerwalls from solar normally but also charge from the grid at night, if necessary.

 

[cwied]

Do you know if we'll be able to set the Powerwalls up to charge from both the grid and solar?

So far, the answer is "no." See here: Powerwall Modes of Operation with Solar

Note that this describes a feature that is not currently available, but is rumored to be rolled out this month.

 

[MorrisonHiker]

So far, the answer is "no." See here: Powerwall Modes of Operation with Solar

Note that this describes a feature that is not currently available, but is rumored to be rolled out this month.

Thanks. I saw that TOU page the other day but wasn't sure if it was only a software issue or if the hardware actually needed to be installed differently to allow them to charge from either the grid or solar.

 

[cwied]

Thanks. I saw that TOU page the other day but wasn't sure if it was only a software issue or if the hardware actually needed to be installed differently to allow them to charge from either the grid or solar.

It's just the firmware that controls it, so in theory they could change it to charge from the grid in the future. I wonder whether they're doing it this way to make sure that the Powerwalls are ITC eligible or if there is some issue with their agreements with the utilities that prevents them from allowing charging from the grid.

 

[MajorCuddles]

or if there is some issue with their agreements with the utilities that prevents them from allowing charging from the grid.

I believe that impact may vary utility from utility (with a mix of state law as well). For instance, I'd imagine most utility tariff agreement would preclude charging from grid and discharging into grid as a means to net metering based arbitrage.

 

[MajorCuddles]

We'll be getting our Powerwalls for free from the referral program, so we won't be getting any ITC on the Powerwalls themselves.

Hi @MorrisonHiker ! I'm in the same situation... I'm pending installation (in permitting right now) of a referral Powerwall award. I will have a net ~$1500 expense for installation costs above the Tesla allowance. I understand that we will also receive a 1099 MISC for the full value of the Powerwall and installation allowance.

I think it's worth consulting with a tax SME, but I'd hope that both the installation expense and the 1099 MISC impacts could be mitigated under the intent of the ITC provided that the Powerwall is integrated with an existing PV system.

 

[cwied]

I believe that impact may vary utility from utility (with a mix of state law as well). For instance, I'd imagine most utility tariff agreement would preclude charging from grid and discharging into grid as a means to net metering based arbitrage.

The discharging does seem to be precluded by my interconnect agreement with PG&E as it calls the powerwalls a "non-NEM eligibile energy storage device." However, it seems like charging from the grid to offset house load during peak rate periods would be allowed. That would make the system ineligible for the ITC, though.