federal and state requirements for installation and tax credits

Greetings all,

Very excited to find this forum, I have been working on a grid interactive plan for some time and had nobody to discuss it with!

First item for review: I am trying to ascertain the requirements for federal and state tax credits. I live in Louisiana which offers a 50% credit on system costs including batteries, combined with the federal program we have a total of 80% tax credit, and I do have the tax liability to take that all in.

The federal F5695 form doesn't state any specific details of the system design and who installs it. Louisiana's 1086F form says the system must be UL listed, a site survey completed (Solmetric iSV is acceptable) and a system performance rating by PVwatts website, along with your contractor license. I have a talented, LA licensed electrician from an industrial power plant who is so excited about my system and learning the technology he will help for free.

Is there any specific data I am missing on the federal program?

Will post my proposed design later, hope you all can give it a look and provide your expert opinion.

Comments

  • BB.BB. Super Moderators, Administrators Posts: 32,800 admin
    Re: federal and state requirements for installation and tax credits

    As I understand, there is no specific Federal requirements for the tax credit (other than the standard must be in service by the end of the year, and the whole credit scheme may be expiring in the next year or so--And therefore, if you have any unused credits to carry forward to the next year, may no longer be good--Check the tax code there).

    Otherwise, it is just your claim that you spent $x,xxx on a system (remember, this has to be out of pocket expenses and if you get state/local credits or checks, you cannot claim that from the Feds too).

    Also, you cannot claim the cost of a whole structure (say you build an outbuilding), but only that required to support the array (heavier supports, flashing/hard points, etc...

    That is about the extent of my knowledge.

    -Bill "not an account" B.
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • solarcrawfishsolarcrawfish Registered Users Posts: 12
    Re: federal and state requirements for installation and tax credits

    Yea I understand about the structure... It is actually going to be a firewood rack with a solar rooftop. Its cheaper than listed solar panel rooftop racking and more valuable as a firewood rack.

    My tax liability is enough to get the entire credit in one year with no carryover.

    It looks like I will be out of pocket about 12k for goods on this system. No checks or incentives aside from tax credits.
  • Organic FarmerOrganic Farmer Solar Expert Posts: 128 ✭✭
    Re: federal and state requirements for installation and tax credits

    We wrote off the expense for our system on our Federal tax filing.

    However we can not write it off on our state tax filing. This state has a list of 'certified' PV electricians. You must hire one from the approved list before you can write-off the expense. Also each certified PV electrician in a systems dealer, and they each require that you buy your system from them.
  • solarcrawfishsolarcrawfish Registered Users Posts: 12
    Re: federal and state requirements for installation and tax credits

    That is specific to Maine? I have found no data to support that in Louisiana... Remember this is the same state that will pay 50% of the cost of converting your vehicle to electric or hybrid and charging systems. LOL. Besides, the NEC 2011 standards, UL listed hardware, and validated site survey tools are the only hard requirements I have identified in tax code and state regulation.
  • ggunnggunn Solar Expert Posts: 1,973 ✭✭✭
    Re: federal and state requirements for installation and tax credits
    Greetings all,

    Very excited to find this forum, I have been working on a grid interactive plan for some time and had nobody to discuss it with!

    First item for review: I am trying to ascertain the requirements for federal and state tax credits. I live in Louisiana which offers a 50% credit on system costs including batteries, combined with the federal program we have a total of 80% tax credit, and I do have the tax liability to take that all in.
    That's not how it works. First you take all the local incentives you can and then you take the 30% federal tax credit on the balance. IANAL, but I'm pretty sure that if you take the federal tax break on the whole amount and get audited, it won't go well for you.
  • Organic FarmerOrganic Farmer Solar Expert Posts: 128 ✭✭
    Re: federal and state requirements for installation and tax credits
    That is specific to Maine? I have found no data to support that in Louisiana... Remember this is the same state that will pay 50% of the cost of converting your vehicle to electric or hybrid and charging systems. LOL. Besides, the NEC 2011 standards, UL listed hardware, and validated site survey tools are the only hard requirements I have identified in tax code and state regulation.

    Each state has it's own laws and requires different things.
  • solarcrawfishsolarcrawfish Registered Users Posts: 12
    Re: federal and state requirements for installation and tax credits

    Thanks... That would have screwed me up big time. It's still a pretty good deal at that rate, would be paying $3500 for $10000 in hardware. That's still cheaper than a typical whole-house generator that people buy around me, with many advantages over it. This is my design basis after all: solar electric with my existing small genset vs big fancy home standby generator.
  • BB.BB. Super Moderators, Administrators Posts: 32,800 admin
    Re: federal and state requirements for installation and tax credits

    There is this site for a starting point:

    DSIRE: Database of Energy Efficiency, Renewable Energy Solar ...
    (rebates/credits/laws and stuff)

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • YehoshuaAgapaoYehoshuaAgapao Solar Expert Posts: 280 ✭✭
    Re: federal and state requirements for installation and tax credits
    ggunn wrote: »
    That's not how it works. First you take all the local incentives you can and then you take the 30% federal tax credit on the balance. IANAL, but I'm pretty sure that if you take the federal tax break on the whole amount and get audited, it won't go well for you.

    As far as I've been informed, you take the full cost, but you gotta pay income tax on the incentives on SRP and any state refund I get. State tax is deductible but if I get refund ($1000 tax credit), the state gives me a 1099 to report on next year's federal return. SRP has sent me 1099 on the solar hot water rebate but I won't get the solar electric and insulation 1099s until next year's as I got those rebates in 2013. So its not deduct SRP rebates from your costs, its use full costs and then pay tax on the 1099s you get from SRP. SRP is my utility company. Same with state. Get a $1000 tax credit, get a 1099 to reimburse dedudction next year. I have about $1500 in carryover but the income tax on the SRP and state 1099s will eat most of that up next year.
  • ggunnggunn Solar Expert Posts: 1,973 ✭✭✭
    Re: federal and state requirements for installation and tax credits
    As far as I've been informed, you take the full cost, but you gotta pay income tax on the incentives on SRP and any state refund I get. State tax is deductible but if I get refund ($1000 tax credit), the state gives me a 1099 to report on next year's federal return. SRP has sent me 1099 on the solar hot water rebate but I won't get the solar electric and insulation 1099s until next year's as I got those rebates in 2013. So its not deduct SRP rebates from your costs, its use full costs and then pay tax on the 1099s you get from SRP. SRP is my utility company. Same with state. Get a $1000 tax credit, get a 1099 to reimburse dedudction next year. I have about $1500 in carryover but the income tax on the SRP and state 1099s will eat most of that up next year.
    Consult a tax attorney before signing any deals.
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