US Tax Rebate question: roof replacement costs and before or after rebate

Leprechaun
Leprechaun Registered Users Posts: 6 ✭
in General Solar Power Topics #1
Considering a 10kw system installed by a local manufacturer of panels - BlueChip Energy. I have searched the forums and don't see an answer. I apologize if this has been asked and answered already.

1. My roof needs to be replaced before the solar is installed. An opinion has been offered by BlueChip that the cost of replacing the roof can be included in amount eligible for the rebate.

2. The local power company rebate is $2/watt so rebate would be $20k. Assuming a purchase price from BlueChip of $50k what is the basis for the tax credit - $50k or $30k?

IRS form 5695 line 15 is Qualified solar electric property costs. The instructions for line 15 is "Enter the amounts you paid for qualified solar electric property. See
Qualified solar electric property costs, earlier." The form or instructions does not include any commentary about the word rebate or discount.

Also from IRS form 5695 the definition for Qualified solar electric property costs is "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. No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. The home does not have to be your main home."

Thoughts?

--Jeff
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Comments

  • Organic Farmer
    Organic Farmer Solar Expert Posts: 128 ✭✭
    #2
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    I would say that your solar system - yes, your roof - no.
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  • inetdog
    inetdog Solar Expert Posts: 3,123 ✭✭✭✭
    #3
    Re: US Tax Rebate question: roof replacement costs and before or after rebate
    Organic Farmer wrote: »
    I would say that your solar system - yes, your roof - no.

    My take (which is totally useless, since I am not a tax attorney or CPA) is that structural reinforcement of the roof which is required for no other reason than to support the panels would be covered, but repair of existing roof defects or renewal of aged roof structure (sheathing, shingles, etc.) would not be covered.
    Thus providing additional roof members on the underside to which the panels mounts are connected, or doubling up of members which would be overstressed would qualify. But if you have to remove the roof to make these structural changes, it becomes more of a gray area.
    SMA SB 3000, old BP panels.
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  • Organic Farmer
    Organic Farmer Solar Expert Posts: 128 ✭✭
    #4
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    "structural reinforcement of the roof which is required for no other reason than to support the panels"

    I had not thought of that.

    To me anything needed for the solar panels makes sense.

    Panels are not that heavy. Mine are around 43 pounds each. The pounds-per-square-foot would be very low.

    Our roof must meet snow-load requirements which I think is 120 pounds-per-square-foot. My roof was designed for 150 just for over-kill.

    Do people really need to add additional support to hold the weight of panels?
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  • inetdog
    inetdog Solar Expert Posts: 3,123 ✭✭✭✭
    #5
    Re: US Tax Rebate question: roof replacement costs and before or after rebate
    Organic Farmer wrote: »
    "structural reinforcement of the roof which is required for no other reason than to support the panels"

    I had not thought of that.
    Do people really need to add additional support to hold the weight of panels?

    Usually not, but to withstand the additional wind loads of the panels and transfer that additional uplift and side force to the main structure of the building, yes.
    SMA SB 3000, old BP panels.
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  • peakbagger
    peakbagger Solar Expert Posts: 341 ✭✭✭
    #6
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    I would be surprised if your roof is required to be 120 psf unless you are up in the "county". The highest roof load in NH is 110 PSF in the town next to me (randolph NH just north of Mt Washington) my town is 95. The issue with roof reinforcement is that many roofs are built to older codes which may have specified lower snow loads. I have seen 10 PSF in old industrial buildings as the assumption was they were uninsulated and the snow would melt off. If any new load is added to the roof, most codes require that the roof be reinforced to current snow load before additional load can be added. Its definitely the "straw that broke the camels back" theory. In reality many juridictions are laid back and they probably wont push it but now that Maine is going IBC statewide its going to be interesting. If all else fails the inspector can require an engineer to stamp the drawings (and take reponsibility if the roof fails)

    You can deduct anything you want for the solar credit, its only if you get auditted is when you need to justify the costs. You get to sweat it out for at least three years and if the IRS can prove the deduction was fraudulent they can go back seven years.

    Unless you need structural reinforcement, I dont see where you can justify replacing the roof membrane with the creidit. There rarely is a need to replace a roof due to a solar install but I expect the contractor may not do the work or cover leaks if you dont.
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  • Cariboocoot
    Cariboocoot Banned Posts: 17,615 ✭✭✭
    #7
    Re: US Tax Rebate question: roof replacement costs and before or after rebate
    Organic Farmer wrote: »
    Do people really need to add additional support to hold the weight of panels?

    Depends on where you're at.
    A properly constructed roof should not notice the addition of solar panels. But there can be some pretty dicey interpretations of "properly constructed".
    Building codes contain minimum standards which can be a bit "too minimum" at times. Like 2x4 rafters every 24" with 3/8" sheathing. No, I'm not kidding; meets code in some places, passes inspection. Wouldn't stand up to one Cariboo Winter. Couldn't support any solar install.

    Logic would agree with inetdog's take; only roofing work done that is necessary to the solar install would be included, not and other needed repair or maintenance. But logic and common sense don't always enter into the formula when you're dealing with rules and regulations. :roll:
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  • Vic
    Vic Solar Expert Posts: 3,208 ✭✭✭✭
    #8
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    Hi Lep..

    BUT, it is up to you to get a definitive answer from YOUR Tax professional. The installer probably has a similar disclaimer, that is is your responsibility to determine the exact credit/rebate that applies to your situation, In My Non-Professional Opinion.
    Good Luck with the system. Vic
    Off Grid - Two systems -- 4 SW+ 5548 Inverters, Surrette 4KS25 1280 AH X2@48V, 11.1 KW STC PV, 4X MidNite Classic 150 w/ WBjrs, Beta KID on S-530s, MX-60s, MN Bkrs/Boxes.  25 KVA Polyphase Kubota diesel,  Honda Eu6500isa,  Eu3000is-es, Eu2000,  Eu1000 gensets.  Thanks Wind-Sun for this great Forum.
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  • Leprechaun
    Leprechaun Registered Users Posts: 6 ✭
    #9
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    Thanks folks. Let me clarify. The question is not structural related. The shingles are 20 yrs old and only have a few years remaining. The question is if I put down new shingles can that be included in the installation cost and available for the federal tax credit.
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  • Blackcherry04
    Blackcherry04 Solar Expert Posts: 2,490 ✭✭✭
    #10
    Re: US Tax Rebate question: roof replacement costs and before or after rebate
    Leprechaun wrote: »
    Thanks folks. Let me clarify. The question is not structural related. The shingles are 20 yrs old and only have a few years remaining. The question is if I put down new shingles can that be included in the installation cost and available for the federal tax credit.
    Could you build a new house to replace a old house because you wanted to put Solar on the roof of New House and claim it as part of the Solar Install ?? I don't think a new roof would qualify for a deduction, but you can ask a Accountant or Tax Attorney and is willing to go to tax court and defend their answer if the IRS challenges you.
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  • Cariboocoot
    Cariboocoot Banned Posts: 17,615 ✭✭✭
    #11
    Re: US Tax Rebate question: roof replacement costs and before or after rebate
    Leprechaun wrote: »
    Thanks folks. Let me clarify. The question is not structural related. The shingles are 20 yrs old and only have a few years remaining. The question is if I put down new shingles can that be included in the installation cost and available for the federal tax credit.

    Yes. Comprendo. :D
    But what we were arguing about in our lateral-thinking way is that such would be classified as a repair, not a necessary upgrade for the solar install, and therefore shouldn't be included under the tax credit. That doesn't mean that it isn't or couldn't be.

    But that is a matter for tax professionals, not engineers. ;)
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  • solar_dave
    solar_dave Solar Expert Posts: 2,397 ✭✭✭✭
    #12
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    One that you can get away with is an upgrade to the service entrance to install solar if your installer does the work, all part of the solar contract. I would be leery of trying to pass the roof off to the IRS.
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  • ggunn
    ggunn Solar Expert Posts: 1,973 ✭✭✭
    #13
    Re: US Tax Rebate question: roof replacement costs and before or after rebate
    Leprechaun wrote: »
    Considering a 10kw system installed by a local manufacturer of panels - BlueChip Energy. I have searched the forums and don't see an answer. I apologize if this has been asked and answered already.

    1. My roof needs to be replaced before the solar is installed. An opinion has been offered by BlueChip that the cost of replacing the roof can be included in amount eligible for the rebate.

    2. The local power company rebate is $2/watt so rebate would be $20k. Assuming a purchase price from BlueChip of $50k what is the basis for the tax credit - $50k or $30k?

    IRS form 5695 line 15 is Qualified solar electric property costs. The instructions for line 15 is "Enter the amounts you paid for qualified solar electric property. See
    Qualified solar electric property costs, earlier." The form or instructions does not include any commentary about the word rebate or discount.

    Also from IRS form 5695 the definition for Qualified solar electric property costs is "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. No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. The home does not have to be your main home."

    Thoughts?

    --Jeff
    My advice is to get tax advice from a tax professional, not from an on line forum.
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  • peakbagger
    peakbagger Solar Expert Posts: 341 ✭✭✭
    #14
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    While reading a Forbes article about solyndra tube type panels, they mentioned that Solyndra had received decision from the IRS that roof membrane replacement could be claimed as part of the system costs as installing a reflective white roof increased the power input by reflecting light onto the back of the tubes. So the IRS has considered roof membranes replacement at least as far as tube tube PV "panels" were concerned. As conventional type panel would not benefit from reflection from the roof, I expect it would be disallowed but the previous poster has the best advice.
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  • rollandelliott
    rollandelliott Solar Expert Posts: 834 ✭✭
    #15
    Re: US Tax Rebate question: roof replacement costs and before or after rebate

    1. No
    2. 30K

    If you buy the equipment yourself and do the homework on what you need and then hire an electrician and a roofer to install them you will wind up paying a LOT less than if you hire a single solar company to do everything. Of course it is a lot more work to do figure out everything your self.
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