Federal Residential Energy Credit and local rebates

[philsfan Administrator Find all posts View Profile Close philsfan]

In Arizona, our energy supplier will subsidize about 50 percent of the cost of Solar panels up to about 27K (they pay 13.5K). On top of that, the Federal Energy credit will pay another 30 percent. The problem is that it is unclear whether that is 30 percent of the 27K or 30 percent of the 13.5K after the energy company subsidy/rebate. In my case, that's the difference between a 4.5 year recoup of my investment and a 9 yr timeframe. The shorter term is a no-brainer, the longer term is still ok, but way less desirable. Most companies have erred on the side of caution and are quoting the Federal credit on the lower 13.5K amount. Not every company is doing that and I am wondering if it's sales gimmick or just incompetence.

Has anyone out there installed solar panels since the credit went into effect and consulted a tax expert regarding an issue similar to this?

The instructions for tax form 5695 are not specific and leave this open to interpretation by the IRS in the future, in my opinion.

"Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States"

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Not an expert on this, but IRS define it as Publication 17 (2009), Your Federal Income Tax

Nonbusiness energy property credit. You may be able to take a credit of 30% of the costs paid or incurred in 2009 for any qualified energy efficiency improvements and any residential energy property.

I will say it is the receipt you get from the company that ask you pay.

Jya-Ning

[philsfan Administrator Find all posts View Profile Close philsfan]

Not an expert on this, but IRS define it as Publication 17 (2009), Your Federal Income Tax


I will say it is the receipt you get from the company that ask you pay.

Jya-Ning

The solar companies will allow you to sign over the rebates to them so it looks like you are only paying the lower number. I talked to a guy who paid the full amount so that the rebate came to him after the fact just so he could feel more secure about claiming the 30 percent of the total cost. His system was 90K so he is far more comfortable financilly than me these days...I'm going to call the IRS on Monday. That doesn't always guarantee anything either, though.