The letter certainly has solar system installers chomping at the bit because of the potential in huge solar storage battery sales. It may be just the things these solar sales and installers need after the slowdown in solar panel sales that is expected as the fallout from President Trump’s imported solar panel tariff. It can also be great news for solar energy fans if they are seeking both tax credits and to maximize their solar generated energy use.
How did this whole thing come about? It all started when a couple petitioned the IRS for a tax credit on their ‘retrofitted’ solar generated power battery storage unit. The IRS ruled in their favor and gave them an ITC credit based on the couple declaring that this battery storage unit was being strictly used for only solar generated power. That apparently was enough for the IRS to lump it in with other existing ITC tax credits under government solar power use incentives.
Not So Fast Says the IRS
According to the IRS this letter is not a reason for every solar power user to go out and buy a solar power storage battery and then try to get an ITC credit. They specifically state in the letter that this is a result of a judgement they make on a case by case basis and by no means should be thought as precedent for tax incentives for those that go out and purchase dedicated solar power storage batteries.
In the open letter the person from the IRS who wrote it specifically states such things as it applies “only to the taxpayer who requested it,” and furthermore that “Section 6110(k)(3) of the IRS code also states it may not be used or cited as precedent.”
If this ruling is aggressively challenged directly to the IRS or other government watchdog agencies those words may have no impact on the resolution. That’s because the letter itself pretty much confirms there is a legal basis to give all those that meet the same criteria as the approved couple the designated tax incentive credit on the installation of solar power storage battery retrofits.
How Much Is The Tax Credit?
It seems that in the couples case they were given the same 30% ITC tax credit that is given for installation of any parts of a home solar power generation system. That is a pretty good chunk of change on something that is as expensive as a retrofitted home solar system battery. It’s estimated that as of now they cost some $3000 for each kilowatt-hour that they can store. You can definitely see why someone would seek a tax credit if they are retrofit installing a larger size solar power storage battery.
As was mentioned, the IRS letter also clearly states that this storage battery must be 100% charged using only solar generated power. That means people who store other means of generated electric power in these solar power battery storage devices would definitely not even be considered for any part of the solar ITC tax credit.
Precedent Is a Big Deal in America
Of course it remains to be seen if this open letter will turn into IRS tax credit policy or just result in one couples good fortune. In truth there is probably a lot more investigation that the IRS has to put into it before what happened to this one couple becomes standard IRS tax credit procedure. The thing is, now anyone else who wants to take a solar battery storage device credit has some precedent to stand on if they are declined the same ITC credit incentive. Precedent tends also to be a powerful ally in court if anyone decides to try their luck against the IRS there.
Meanwhile all the solar system installers will just have to take a wait and see approach as to how this ruling may affect solar generated power storage batteries. It could be the next big sales item they have been waiting for or simply wishful thinking that will soon pass.