You bring up a great point, though Tesla does not appear to factor in a full 30% credit, I put in the following:
- 1750 sqft house (calculator comes up with 2168 sqft roof)
- no powerwall
Got the following output:
- $64,200 cost of roof
- 60% solar
- $16,400 tax credit (=25.5% of quoted cost of total roof which calculates to 30% of a $54,666 'solar portion' of the roof cost )
When I change the 60% solar slider to 0% solar, I get:
- $23,800 cost of roof
- 0% solar
- $0 tax credit.
Makes sense that tax credit is now $0, because I'm not making a solar energy investment at that point.
Bottom line: it does appear to me that Tesla is not taking tax credit in their calculation for the non-solar portion of the roof. Now, this begs one question: Tesla can game the tax credit system by making the solar portion of the roof disproportionately expensive, and the non-solar portion disproportionately cheap (thus maximizing the portion of the project that is eligible for a credit).
Anyway, my house is worth $160K, a $64K roof doesn't make any sense. I put on a new roof myself for ~$4,000 in materials (asphalt shingles), and some pizza money to convince my friends to come help out for a day. I can put in an equivalent solar system for $10K myself. That's a total of $14K, for the same energy production and a roof over my head. Only thing I am short on is the looks and the durability, but that is not worth an incremental $50K. Thanks Tesla, but this is going to be for the rich and famous!
Thanks for your input.
It looks like Tesla calculates the credit in your example by ($23,800)(.4) = $9,520. $64,200-$9,520 = $54,680, close enough to your figure above. I would
NOT sign a tax return as paid preparer using those Tesla Tax Techniques.
How much of the cost is demolition and disposition of the old roof? That is not a cost eligible for the credit. Nor are the flashings and other materials needed to replace a roof.
To use an extreme example, if a person replaced a conventional roof with another conventional roof, simultaneous with installing PV panels over 60% of the area, would he be eligible to receive the tax credit on the replacement roof? No. (With emphasis.)
If a client came to me in a few years with your example, I would have to determine an approximate and reasonable value of the cost of the solar tiles that exceeded the cost of the roof. I would hope that the final invoicing might give us some idea as to the components of the job.
As far as Tesla gaming the system: It is hard to say. It only takes one bulldog auditor to discover that something was exaggerated or misrepresented for the chips to fall for that one taxpayer, especially if the assessment winds up in Tax Court, and the taxpayer loses. Then it is just a matter of the IRS sorting out all the returns that have higher-than-normal residential solar credits on their tax returns to commence a mass correspondence audit.
One thing about our good buddies at the IRS: they may not be the sharpest tools in the shed. But they do have the benefit of compiling billions of pieces of data from 150 million tax returns and then determining how each of our returns stacks up against everybody else. Their data can zero in on zip code, census tracts and other demographics readily available. If the "average" solar credit where you live is $4,000-$7,500, and you claim $16,000, you might be receiving an audit notice.
And we should not forget the Section 6662 accuracy-related penalty at 20% of the understated tax, plus interest from April 15 of the original due date.