How do Federal/state tax credits work with Florida's Utility Rebates?

rollandelliott
rollandelliott Solar Expert Posts: 834 ✭✭
in General Solar Power Topics #1
Some Utility companies offer $2/watt on an installed system.
For example if you install a 10KW system they will give you $20,000.
Lets say you have a friend who is an electrical contractor that will install it for $10,000.

Total cost of $30,000

The utility gives you $20,000.

My question is this? Can you get the Federal tax credit on the whole $30,000 or just the $10,000 install cost?
according to this solar panel seller you can get both!?!
http://www.sunelec.com/index.php?main_page=fpl_rebate

I just kind of find that hard to believe. You could actually MAKE money if you know a contractor who did not charge a lot to install.

Thanks!
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Comments

  • Solar Guppy
    Solar Guppy Solar Expert Posts: 1,989 ✭✭✭
    #2
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?

    Read this

    http://forum.solar-electric.com/showthread.php?t=10837

    You can't double dip. Either you take the grants to reduce the cost basis or you claim the grant as income and take the entire cost basis for the 30% tax credit
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  • ggunn
    ggunn Solar Expert Posts: 1,973 ✭✭✭
    #3
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    rollandelliott wrote: »
    Some Utility companies offer $2/watt on an installed system.
    For example if you install a 10KW system they will give you $20,000.
    Lets say you have a friend who is an electrical contractor that will install it for $10,000.

    Total cost of $30,000

    The utility gives you $20,000.

    My question is this? Can you get the Federal tax credit on the whole $30,000 or just the $10,000 install cost?
    according to this solar panel seller you can get both!?!
    http://www.sunelec.com/index.php?main_page=fpl_rebate

    I just kind of find that hard to believe. You could actually MAKE money if you know a contractor who did not charge a lot to install.

    Thanks!

    The Federal tax credit is on out of pocket expenses after all other rebates are applied. This was a common misunderstanding a couple of years ago and some folks got burned.

    You may be able to run the numbers differently as Guppy said, and claim the rebates as income and take the tax credit on the gross outlay, though I thought that was only for commercial installations.

    When something looks too good to be true, look again.
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  • rollandelliott
    rollandelliott Solar Expert Posts: 834 ✭✭
    #4
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?

    well $2/watt is too good to be true too, but it's there. :) thanks for the tips looks like I need to talk to a tax advisor
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  • ggunn
    ggunn Solar Expert Posts: 1,973 ✭✭✭
    #5
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    rollandelliott wrote: »
    well $2/watt is too good to be true too, but it's there. :) thanks for the tips looks like I need to talk to a tax advisor
    It used to be $3.75/W here in Austin. Not any more, though.

    And yes, by all means talk to a tax professional rather than depending on what you read on an internet forum. 8)
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  • sub3marathonman
    sub3marathonman Solar Expert Posts: 300 ✭✭✭
    #6
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?

    OOOH, that's the FPL Rebate!!! I would strongly advise to extensively research this. My preliminary research was that the "first come, first served" may present a problem with repayment. Just as the Florida Solar Rebate burned many, many people who believed the State of Florida would honor their commitment. (I was one of the fortunate ones who managed to get the entire rebate promised.)

    According to the FPL checklist, http://www.fpl.com/landing/solar_rebate/pdf/SolarRebate_Checklist_PV.pdf , you must already have chosen a contractor, decided on a specific PV system, and gotten a final quote. Then on 6/21, or just a few days from today, you've got to fill out the rebate form. Then, when you're lucky enough to have FPL approve it, you've got 90 days to get everything done. So if you run into a problem with the permit application, the time keeps ticking, run into a problem with the contractor, the time keeps ticking, run into a problem with the weather, the time keeps ticking. It sounds like a long time, but 90 days will go by pretty fast when there's $20,000 or so on the line. You may be able to get a contractor to accept the rebate as payment, but good luck doing that. I know if I was a contractor I wouldn't.
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  • sub3marathonman
    sub3marathonman Solar Expert Posts: 300 ✭✭✭
    #7
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    rollandelliott wrote: »
    Some Utility companies offer $2/watt on an installed system.
    For example if you install a 10KW system they will give you $20,000.
    Lets say you have a friend who is an electrical contractor that will install it for $10,000.

    Total cost of $30,000

    The utility gives you $20,000.

    OK, I think there is another problem working here.

    The offer is a $2/watt rebate on an installed system. I don't think it is possible to get a 10kW system, installed, for $30,000. This is just a guess, but it might be possible to get a system installed for $5.50/watt, which would work out to a $55,000 investment, a $20,000 rebate from the utility, a $16,500 tax credit (30% of $55,000) for your 2011 Federal Tax, a $20,000 "other income" for your 2011 Federal Tax, and a carryover of the unused Federal Tax credit to the year 2016. And maybe a $16,500 reduction in your Federal Tax basis for your house, if the PV system is there when the house is sold. (As with all federal tax discussion, please understand I'm not a tax expert, and you should discuss this with your own professional tax attorney.)
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  • rollandelliott
    rollandelliott Solar Expert Posts: 834 ✭✭
    #8
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?

    Of course you can't get a 10KW system installed for $30,000 that is why I clearly stated "Lets say you have a friend who is an electrical contractor"

    If you worked together with your friend it would probably take 3 days to install.

    I have researched FPL rebates and have not found any people that say they were scammed from this offer. How about backing up accusations with facts?
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  • Cariboocoot
    Cariboocoot Banned Posts: 17,615 ✭✭✭
    #9
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    rollandelliott wrote: »
    I have researched FPL rebates and have not found any people that say they were scammed from this offer. How about backing up accusations with facts?

    Who said anyone had been scammed? People have misunderstood the complex rules and regulations and not gotten the financial advantage they thought they were going to get. That isn't the same as being scammed.

    Claiming a cost basis $20,000 higher than the actual cash outlay, on the other hand, might be considered an attempt to defraud the government. I'm not a tax accountant either, but my wife is. Even though we don't have these incentives here the principle is the same: telling the government you paid $30,000 when your out-of-pocket expense is only $10,000 is false invoicing, and a federal offense in Canada. Just something you should think about.
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  • ggunn
    ggunn Solar Expert Posts: 1,973 ✭✭✭
    #10
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    rollandelliott wrote: »
    Of course you can't get a 10KW system installed for $30,000 that is why I clearly stated "Lets say you have a friend who is an electrical contractor"
    Your friend might have a tough time doing that even if gives you his design and labor for free.
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  • Solar Guppy
    Solar Guppy Solar Expert Posts: 1,989 ✭✭✭
    #11
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    ggunn wrote: »
    Your friend might have a tough time doing that even if gives you his design and labor for free.

    Actually, You can get Evergreens "local" for about 1.50 watt , Other brands for 10 cents more, so thats 15K. Pair of 5KwGT inveters for 6K ( Xantrex , Sunnyboy or Fronius ). That leaves 9K for BOS

    Using Pool Cage aluminum rails ( 2"x4" ) racking can be under 1K. Wiring, Disconnect ect another 1K , 500 for day labor, 500 for permits and documentation.

    So for under 25K I could do it, that leaves 5K to hire the pro and his license #. When I did my rebate system, It cost $250 for that.
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  • rollandelliott
    rollandelliott Solar Expert Posts: 834 ✭✭
    #12
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?
    I'm not a tax accountant either, but my wife is. Even though we don't have these incentives here the principle is the same: telling the government you paid $30,000 when your out-of-pocket expense is only $10,000 is false invoicing, and a federal offense in Canada. Just something you should think about.

    Good thing I don't live in Canada and the rules in the USA might be different......Obviously I need to talk to a tax person because these examples from non tax accounts in different countries won't hold any weight. I'm not going to tell the IRS, well I read it on the forum.

    Was hoping someone on this forum actually already went through the utility rebate program and knew from first hand experience not conjecture. guess not.

    As far as getting a system installed with a friend for $30,000, as Mr guppy points out it is easy. I can get a grid tie system, panels and inverter and combo box for $2 a watt with evergreen for $20,000. That leaves me $10,000 to buy an aluminum rack, wire, permit fees and pay my electrical contractor friend a few grand to make it worth his time.

    The aluminum rack and wire might cost $2,200. If you have a really good friend you might only wind up paying him $3000 and get the whole thing installed for $25K.
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  • Solar Guppy
    Solar Guppy Solar Expert Posts: 1,989 ✭✭✭
    #13
    Re: How do Federal/state tax credits work with Florida's Utility Rebates?

    I did the rebate and tax credit, you can't double dip
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