Federal rebate on solar install

[russ]

if I have a need to know about tax matters like that I'll call my accountant, not someone with skin in the game like the vendor.

A good and proper suggestion - anyone listening to a vendor only on this point is a fool and most likely will get the horn if audited. The IRS examiner will not be at all impressed by, "but the vendor told me".

[J.P.M.]

The vendor's incentive were offer to those who are out of CSI money, the incentive basically replace the CSI the customers missed. I have no idea if there a 1099 involved, why not pick up the phone and call them if you are interested. And please let us know.

My understanding is that a 30% tax credit applies to the balance of sale, i.e., after rebates or other price reductions, regardless of who provides them - the state, utility, vendor, whoever. Part of what I'm saying is that what you are describing and what I also thought of, as I'm sure most folks did also, sort of implies it may be smart and savvy to do something that may go beyond tax avoidance, and I'd rather not insult people by inferring they would entertain such an idea. Probably just my anachronistic old fart manners getting in the way of progress.

The last time I called this vendor was after they asked me to share some software I'd written. I suggested I'd entertain that idea after they gave me a written response to my formal request for proposal. They then told me that the best they could do was about $5.20 -$5.40/Watt for what I wanted. "Less would be a waste of our time." I took that as a decline of my RFP. I declined their request for my stuff. They suggest I not call them again. I have honored their last request. I expected more from a Gaelic outfit. (BTW: I got what I wanted as per my RFP for $4.50/Watt - 8 week startup after signing from another vendor).

Like you, I also have no idea if a 1099 is involved in their scheme. However, if I have a need to know about tax matters like that I'll call my accountant, not someone with skin in the game like the vendor.

[silversaver]

I believe I understand. As a matter of fact, that logic was one of the first things I thought of when I reviewed the first proposal from that vendor that had their "reward bucks" as part of my HOA duties of reviewing/recommending solar jobs. Sort of a blinding flash of the obvious you might say.

At the time the thought occurred to me that the scheme could amount to something more than tax avoidance.

I didn't fall off a turnip truck last week and I try not to be a moral blue nose. I also like to be respectful in my opinions about others - in this case by starting out thinking most folks have a clue about their tax liabilities and responsibilities and would rather be honest about it, at least at the start. The logic I came up with, pretty much identical as presented above seems to infer people think and will behave otherwise given the chance. Maybe the vendor will send a 1099 and keep the customer off the horns of a moral and perhaps fiscal dilemma. If so, the delay of discount seems a bit silly as the tax liability will likely be similar as a first approximation - money falling over to the next tax year, etc. So, to what end ?

FWIW, I have had contact with my neighbors who have used that vendor as part of my HOA duties, but have not mentioned or discussed their taxes as that is absolutely none of anyone else's business.

Any IRS auditors out there ? NU ??

The vendor's incentive were offer to those who are out of CSI money, the incentive basically replace the CSI the customers missed. I have no idea if there a 1099 involved, why not pick up the phone and call them if you are interested. And please let us know.

[PenguinSolar]

This has already been discussed before on this thread. Bando is a CA CPA and what he said in the thread makes sense so I would follow his advice. The "in service" date would be the date when your system gets officially turned on by the utility company. It seems like the safest approach would be not to claim until the year when your system is "in service".

Perfect! Exactly what I'm looking for thanks and happy holidays!

[Volusiano]

Got an interesting question.

If your installation is going to span years do you just file per year for the Fed Credit? I recall you can't claim unless the expense is incurred in the filing year.

For instance you install starting Dec 30th but work won't complete till Jan 2nd. Typically it's half of the remaining balance at start of install and the final payment at completion.

My other strategy would just go ahead and pay of Dec 30th and then also on Dec 31st so all payments are occurred this year and it's clean.

Of course this approach exposes me the homeowner as once the installer gets all my money I have no leverage (although the installer is large and reputable Slvn Solar).

Wondering if anyone knows and has any recommendations.

Additionally, I'll need to also back out the utility rebate (CSI) off the top although won't know that exact amount till later (but hopefully before 4/15).

Thanks!

This has already been discussed before on this thread. Bando is a CA CPA and what he said in the thread makes sense so I would follow his advice. The "in service" date would be the date when your system gets officially turned on by the utility company. It seems like the safest approach would be not to claim until the year when your system is "in service".

[J.P.M.]

Yes, for SDGE area the money has been re-allocated but not for long. The CSI money is base on web calculation.

I would prefer the installer offer the credit after 90 days, because if they offer the discount out front you would lost the 30% tax credit from Fed incentive. agree? You actually getting more discount.

For example

If solar Job cost you $10,000. Let's say your CSI money is $500

Usually it will be $10,000 - $500 = $9,500
Fed incentive of 30% will be $9,500 X 30% = $2,850.
You net price will be $9500 - $2850 = $6,650

Now without the CSI or installer's rebate after 90 day:

Solar job $10,000
Fed incentive of 30% will be $3000
Your net price is $10,000 - $3,000 = $7,000
after 90 days you get $500 from installer
actual net price is $7,000 - $500 = $6,500

It is not much differnt but you get the idea of $6,650 vs $6,500

I believe I understand. As a matter of fact, that logic was one of the first things I thought of when I reviewed the first proposal from that vendor that had their "reward bucks" as part of my HOA duties of reviewing/recommending solar jobs. Sort of a blinding flash of the obvious you might say.

At the time the thought occurred to me that the scheme could amount to something more than tax avoidance.

I didn't fall off a turnip truck last week and I try not to be a moral blue nose. I also like to be respectful in my opinions about others - in this case by starting out thinking most folks have a clue about their tax liabilities and responsibilities and would rather be honest about it, at least at the start. The logic I came up with, pretty much identical as presented above seems to infer people think and will behave otherwise given the chance. Maybe the vendor will send a 1099 and keep the customer off the horns of a moral and perhaps fiscal dilemma. If so, the delay of discount seems a bit silly as the tax liability will likely be similar as a first approximation - money falling over to the next tax year, etc. So, to what end ?

FWIW, I have had contact with my neighbors who have used that vendor as part of my HOA duties, but have not mentioned or discussed their taxes as that is absolutely none of anyone else's business.

Any IRS auditors out there ? NU ??

[PenguinSolar]

Splitting rebate across years?

Got an interesting question.

If your installation is going to span years do you just file per year for the Fed Credit? I recall you can't claim unless the expense is incurred in the filing year.

For instance you install starting Dec 30th but work won't complete till Jan 2nd. Typically it's half of the remaining balance at start of install and the final payment at completion.

My other strategy would just go ahead and pay of Dec 30th and then also on Dec 31st so all payments are occurred this year and it's clean.

Of course this approach exposes me the homeowner as once the installer gets all my money I have no leverage (although the installer is large and reputable Slvn Solar).

Wondering if anyone knows and has any recommendations.

Additionally, I'll need to also back out the utility rebate (CSI) off the top although won't know that exact amount till later (but hopefully before 4/15).

Thanks!

[silversaver]

I don't believe The CSI situation is quite that simple. In some areas, the money has expired. Others like SDG & E territory, The $$'s ran out so other sources were re-allocated - probably enough to last another 3-6 months depending on demand/how many systems sold. Also, the $.20/Watt is/was the max. before reductions for panel eff./orientation/other stuff. The actual was probably closer to $.15 $.18/Watt or less for a lot of shading or way off south orientation. As for that matching CSI nonsense, why not just reduce the price up front ?

Yes, for SDGE area the money has been re-allocated but not for long. The CSI money is base on web calculation.

I would prefer the installer offer the credit after 90 days, because if they offer the discount out front you would lost the 30% tax credit from Fed incentive. agree? You actually getting more discount.

For example

If solar Job cost you $10,000. Let's say your CSI money is $500

Usually it will be $10,000 - $500 = $9,500
Fed incentive of 30% will be $9,500 X 30% = $2,850.
You net price will be $9500 - $2850 = $6,650

Now without the CSI or installer's rebate after 90 day:

Solar job $10,000
Fed incentive of 30% will be $3000
Your net price is $10,000 - $3,000 = $7,000
after 90 days you get $500 from installer
actual net price is $7,000 - $500 = $6,500

It is not much differnt but you get the idea of $6,650 vs $6,500

[J.P.M.]

Where are you getting your info? CSI is 20 cent per watt. Most of installers now matching the CSI with their own incentive program 90 days after installation. read more...

I don't believe The CSI situation is quite that simple. In some areas, the money has expired. Others like SDG & E territory, The $$'s ran out so other sources were re-allocated - probably enough to last another 3-6 months depending on demand/how many systems sold. Also, the $.20/Watt is/was the max. before reductions for panel eff./orientation/other stuff. The actual was probably closer to $.15 $.18/Watt or less for a lot of shading or way off south orientation. As for that matching CSI nonsense, why not just reduce the price up front ?

[silversaver]

I read several of the posters saying they get $1.00 to $2.00 per kW DC rebates. That's fantastic! Here in Southern CA we are getting $0.09 per kW DC...........except the state ran out of $$$$$ So we get......wait for it........wait for it.............NOTHING!

Where are you getting your info? CSI is 20 cent per watt. Most of installers now matching the CSI with their own incentive program 90 days after installation. read more...

[bigroccrek]

Power Company Rebates

I read several of the posters saying they get $1.00 to $2.00 per kW DC rebates. That's fantastic! Here in Southern CA we are getting $0.09 per kW DC...........except the state ran out of $$$$$ So we get......wait for it........wait for it.............NOTHING!

[J.P.M.]

And that is why you keep it simple. How much are they saving a month on their electric bill and what is the expected remaining life of the system. Give them that number. You're trying to get a little extra on the sales price of your home and not trying to educate them on all the nuances of actuarial tables and depreciation of assets much less wanting to get into the weeds on current replacement costs. The most important thing to remember in home sales is the buyer doesn't care what you paid for it or what you owe on it. That works for the house as well as any updates. They only care about what it is worth right now. It is easy to show that a home with an operating solar system is worth more than one without it. Keep it simple and you should be able to recoup what you have into it if not more.

The buyer will come up with a number in their mind what they feel it is worth to them. "Hmmm, we will save $20,000 on electric bills in the next 20 years... yeah, I guess we can offer another $10K and feel pretty good about it."

Respectfully:

1.) As you suggest - A home is only worth what someone is willing to pay. I agree that what the seller thinks a home is worth has little if any bearing on what the buyer may think.

2.) I try to look at things from the other person's perspective and think as that person, a potential buyer, might.

3.) As much as I like KISS, sometimes not everything can be explained in 25 words or less. I've had some success reading my audience and changing the presentation to be the most effective with as few words as possible and still communicate effectively and hopefully completely. Some folks you just can't reach.

4.) I'd suggest it is just as easy to come up with likely scenarios that suggest a home with an operating solar system is worth less or is less marketable than one without a working solar system. A few off the top of my head:
- The system is old, not maintained and MAY need maintenance, just how old or how much maint. may be unknown to a canny but solar-ignorant and cynically skeptical potential buyer. They may be put off by their ignorance and the uncertainty borne of that ignorance.
- The potential buyer thinks solar is a scam, is put off by ugly panels and may ask for price reduction or not want it at all. I'd suggest solar energy systems may not increase the marketability of a property for that segment of the market. Not everyone is a solar fan like most of us.
- The potential buyer MAY be solar savvy and a fan, but realize the system is wrong for their situation - e.g., a system sized to produce 2X the potential buyer's annual load. Why pay more for what you don't need ? That same potential buyer may want the newest stuff of their own choosing, not someone else's stuff who was probably solar ignorant and got talked into something a number of years ago.
- etc.

[Naptown]

At .93 a therm and a $13 customer charge I will stick with gas.

[bcroe]

Cheap Natural Gas has helped to keep rates steady. We are now going to begin exporting NG so our prices will go up. Lots of pressure to decommission cheap coal-fired plants as they are regulating them into oblivion. Enjoy this cheap energy... it won't last long.

It is up to the agent to EDUCATE the buyer as to what having solar can do for them. $100 savings per month for 20 years is $24,000. Take that $100 saved per month and put it towards mortgage principle and it is worth closer to $50,000 in reducing mortgage obligation over 20 years. Too many order-takers and not enough closers in real estate today. I am a mortgage broker in my day job, so I can say that.

The mortgage calculation can be used against ANY other expenditure. Except, some who figured that
out don't have a mortgage. The gas company finally ran out here and offered to hook up their cheap
gas. EXCEPT, there is now a $28 a month connect fee to make sure they rake in enough. It was only
$7 a few years ago; I only need the gas a few months of the year. I went another way. Bruce Roe

[GridGrants]

I believe I agree with most all of the above as logical and sensible. I'm less than optimistic of most real estate people understanding any of it much less applying it.

And that is why you keep it simple. How much are they saving a month on their electric bill and what is the expected remaining life of the system. Give them that number. You're trying to get a little extra on the sales price of your home and not trying to educate them on all the nuances of actuarial tables and depreciation of assets much less wanting to get into the weeds on current replacement costs. The most important thing to remember in home sales is the buyer doesn't care what you paid for it or what you owe on it. That works for the house as well as any updates. They only care about what it is worth right now. It is easy to show that a home with an operating solar system is worth more than one without it. Keep it simple and you should be able to recoup what you have into it if not more.

The buyer will come up with a number in their mind what they feel it is worth to them. "Hmmm, we will save $20,000 on electric bills in the next 20 years... yeah, I guess we can offer another $10K and feel pretty good about it."