Clearing up on the federal tax credit

[Nyholt]

Hi guys,

I tried to do some googling, but couldn't find any clear answer.

Regarding the federal ITC.

1.
The 30% tax credit is a one-time reduction of the builders current year tax liability, right? That means it is not possible to spread the reduction over multiple years, if one cannot fully benefit from it in the year of installing?

2.
There's no size limit on the plant being built? I am thinking in terms of a company that planned to build for instance a 10MW plant, to set up a PPA with the grid. Or net metering or off-grid power supply for that sake.

Thanks a lot!

[J.P.M.]

Hi guys,

I tried to do some googling, but couldn't find any clear answer.

Regarding the federal ITC.

1.
The 30% tax credit is a one-time reduction of the builders current year tax liability, right? That means it is not possible to spread the reduction over multiple years, if one cannot fully benefit from it in the year of installing?

2.
There's no size limit on the plant being built? I am thinking in terms of a company that planned to build for instance a 10MW plant, to set up a PPA with the grid. Or net metering or off-grid power supply for that sake.

Thanks a lot!

No and yes, MAYBE, sometimes, depending, in that order. Check the U.S. Internal Revenue Service website. Like most of the U.S. tax code, it's a complicated mess not well understood by most anyone.There are several/many qualifications/limitations. A 10MW facility is a different animal than most folks around here are dealing with. I'd check with accountants and financial slugs familiar with both U.S. tax law and solar energy, and be on the lookout for shysters. And, don't shoot me, I'm only a messenger with an opinion.

[russ]

A 10 mW system would be a commercial system - has to take a totally different route and different permitting procedures.

Talk to your utility first.

[Nyholt]

Thanks guys. Yes, I am more interested in the details surrounding commercial systems. Although the credit should be 30% for both com and residential, are the procedure and permits any harder to get for commercial systems? Are there any numbers or data on this?

From the DsireUSA website its not too clear how they distinguish and treat the different systems, or how easy it is to be "refunded". Seems every PV system installed would qualify, but from I read in here it seems not(?).

[inetdog]

One big difference about a commercial scale system is that it may not be covered by state net-metering laws.
Another is that it requires a different type of interconnect agreement with most POCOs.
Whether there are different building permit processes or not may be a local difference.
The NEC generally has weaker requirements for non-dwelling locations and for facilities where access to wiring is restricted to qualified (in the OSHA sense) staff.

[Nyholt]

Thanks, inetdog.

I realise we're now at a level beyond my knowledge of utilities, so I need to do some research into this. That last sentence of yours, hehe, I'm off with regards to NECs and OSHAs.

But one more. The tax credit. Is it possible to delay/spread it over multiple years, or is it "take benefit in year one, or lose it"?

[inetdog]

Thanks, inetdog.

I realise we're now at a level beyond my knowledge of utilities, so I need to do some research into this. That last sentence of yours, hehe, I'm off with regards to NECs and OSHAs.

But one more. The tax credit. Is it possible to dwell it over multiple years, or is it "take benefit in year one, or lose it"?

IANATL, but for residential the credit can be carried over for a number of years. But some potential users (like nonprofit organizations) will never have tax liability against which to apply the credit. You can also start a new round of Federal credit(s) when you expand the system, but state incentives may not all allow that.