Tax credit for RV solar systems

[John and Debbie]

In looking at the directions for federal form 5695, it appears that the only tax credit is for a home or primary residence.  That could be something other than a house, but it's where we primarily live in.  I was under the impression that we could write off as a credit on taxes owed, the cost of the solar panels, and possibly the lithium batteries and inverter.  Has anyone looked into whether there is a way to take a credit on taxes owed because we have purchased solar panels on our travel trailer.  If you live in your Ollie and that's your primary residence, then it may qualify, but as a vacation trailer, does it qualify?  TIA

John

[Steph and Dud B]

Last I checked, an RV is considered a second home if you live in it at least 14 days of the year. You can claim the cost of solar generating equipment (the panels, controller, and wiring to the batteries) but not the storage batteries or any non-solar charging equipment like the converter/inverter. (You can only claim the batteries if they can only be charged by solar and have no provision for charging by shoreline, etc.) I asked OTT to send me the dollar value of my panels, controller, charging wiring, and installation and they did so.

This is mostly from memory, so check further before committing.

[Chukarhunter]

I researched this extensively when I bought my LE II back in 2020 and confidently claimed a 30% tax credit for the cost of my solar system option (including inverter) from Oliver plus the $2800 I spent on four LiPO4 batteries (Oliver did not offer a lithium option at the time).  The total tax credit was just over $1,800.   As I remember, you could not claim a tax credit for lithium batteries by themselves.  The batteries had to be purchased and installed at the same time as the solar system and inverter to claim a tax credit on the batteries.  The rules may have changed since then.

[Steph and Dud B]

10 hours ago, Chukarhunter said:

The rules may have changed since then.

Found this: https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics Says the inverter does count.

They changed the battery rule recently, too: https://www.energy.gov/eere/solar/articles/solar-investment-tax-credit-what-changed "[batteries] that have a capacity rating of 3 kilowatt-hours (kWh) or greater (for systems installed after December 31, 2022)." So, from what I can tell, I can't claim my batteries because they were installed in 2022, but anyone with a 2023-built trailer will be able to.

Somebody tell me if I'm reading this wrong...

 

[Steph and Dud B]

Then I found this: https://www.solar.com/learn/how-getting-a-home-battery-affects-your-federal-solar-incentive-tax-credit/ which says the 2023 cutoff is only for the minimum size, and all batteries in 2022 are included. Very confusing.

[Rivernerd]

On 2/2/2023 at 8:42 AM, Steph and Dud B said:

So, from what I can tell, I can't claim my batteries because they were installed in 2022, but anyone with a 2023-built trailer will be able to.

I read that provision differently.  It is arguable that qualifying batteries installed during 2022 are not excluded from the credit.  See:

https://www.solar.com/learn/how-getting-a-home-battery-affects-your-federal-solar-incentive-tax-credit/

UPDATE:  SEE POST BELOW SUGGESTING THAT 2022 LEGISLATION MAY HAVE MADE THE INFORMATION BELOW MOOT.

But, of greater concern is the apparent requirement that, for battery costs to be eligible for the credit, 100% of the energy used to recharge the batteries must come from solar.  See:

https://www.taxequitytimes.com/2018/03/residential-solar-storage-eligible-tax-credit-subject-100-cliff/

It seems to me that our Oliver trailers can't meet the 100% requirement because the inverters can, and do, charge the batteries from either shore power or solar.  So, it appears to me that regardless of the installation date, batteries installed as part of a solar upgrade in an Oliver do not qualify for the federal tax credit.

I welcome contrary views. 

And, this is not tax advice!  You must consult with your own counsel or tax advisor for reliable advice before filing your tax return.

[John and Debbie]

16 minutes ago, Rivernerd said:

I read that provision differently.  It is arguable that qualifying batteries installed during 2022 are not excluded from the credit.  See:

https://www.solar.com/learn/how-getting-a-home-battery-affects-your-federal-solar-incentive-tax-credit/

But, of greater concern is the apparent requirement that, for battery costs to be eligible for the credit, 100% of the energy used to recharge the batteries must come from solar.  See:

https://www.taxequitytimes.com/2018/03/residential-solar-storage-eligible-tax-credit-subject-100-cliff/

It seems to me that our Oliver trailers can't meet the 100% requirement because the inverters can, and do, charge the batteries from either shore power or solar.  So, it appears to me that regardless of the installation date, batteries installed as part of a solar upgrade in an Oliver do not qualify for the federal tax credit.

I welcome contrary views. 

And, this is not tax advice!  You must consult with your own counsel or tax advisor for reliable advice before filing your tax return.

"It seems to me that our Oliver trailers can't meet the 100% requirement because the inverters can, and do, charge the batteries from either shore power or solar.  So, it appears to me that regardless of the installation date, batteries installed as part of a solar upgrade in an Oliver do not qualify for the federal tax credit."

It would appear to me that only the panels and the wiring possibly would be the only items that would qualify.  I will let our tax accountant figure it out.

John

[Steph and Dud B]

2 hours ago, Rivernerd said:

See:

https://www.taxequitytimes.com/2018/03/residential-solar-storage-eligible-tax-credit-subject-100-cliff/

It seems to me that our Oliver trailers can't meet the 100% requirement

I read that article, too, which was what I was referencing in my first post. But, I also see the date was 2018. Now I'm wondering if that requirement has changed. ??

[Steph and Dud B]

After reading it all again, I'm back to my starting position: With my 2022 I can only claim the panels, wiring, installation, and (apparently) the inverter. The batteries are no-go because they aren't 100% solar charged.

There is some verbiage about "standalone" power storage systems being acceptable in 2023 if they are large enough (https://programs.dsireusa.org/system/program/detail/1235), which is interesting because those are not necessarily powered by solar at all! That might overrule the 2018 ruling @Rivernerd referenced. But, it won't help me with my 2022. 😕

 

Edited February 2, 2023 by Steph and Dud B
Added source

[Bill and Nancy]

It would seem to me if the battery is capable of being charged 100% by solar which I believe they are then they should eligible for the tax credit. If I boon dock for a year and never connect to shore power seems to me Im running 100% on solar. Just because you can charge them by plugging them in doesn't mean I ever will. What if I plug them into an external solar array it seems to be a gray area

[Rivernerd]

22 hours ago, Rivernerd said:

But, of greater concern is the apparent requirement that, for battery costs to be eligible for the credit, 100% of the energy used to recharge the batteries must come from solar.  See:

https://www.taxequitytimes.com/2018/03/residential-solar-storage-eligible-tax-credit-subject-100-cliff/

It seems to me that our Oliver trailers can't meet the 100% requirement because the inverters can, and do, charge the batteries from either shore power or solar.  So, it appears to me that regardless of the installation date, batteries installed as part of a solar upgrade in an Oliver do not qualify for the federal tax credit.

After further review, the 2018 IRS letter ruling referenced above may not apply after passage of the Inflation Reduction Act of 2022.  It is arguable (but far from crystal clear) that this new legislation changed the status of batteries installed with solar panel systems eligible for the Clean Energy Credit, so the 2018 IRS letter ruling referenced above has been rendered moot by that statute.

Take a hard look, or another look, at this article referenced by Steph and Dud B above:

https://www.solar.com/learn/how-getting-a-home-battery-affects-your-federal-solar-incentive-tax-credit/

It also appears to me that the 3kw minimum, whenever it applies, is not relevant to Oliver owners who have at least 250ah of battery capacity included with their installation.  At 12v, 3kw= 250ah.  So, our Lithium Pro Package, for example, with 390ah of battery capacity, more than meets this minimum.

I welcome other input on this issue.

Again, this is not tax advice!  You must consult with your own tax professional, or attorney, and make your own decisions when and if to claim the Residential Clean Energy Credit.  But, I hope it helps you obtain reliable and informed advice from your tax professional.

[Dave and Kimberly]

   I have just investigated this very point:   Can we file for a tax credit in regards to the solar panels, inverter and batteries for a newly purchased Oliver.   I was extremely skeptical of the claims (in Oliver Trailer Owners FaceBook group).    In the discussion, I think everyone was an Oliver owner.   One was a licensed CPA with much experience and had researched the tax codes specific to the very questions that Oliver owners were asking.   In addition, there were at least three that had successfully filed (under the advice of professional CPA's) and received their credit for everything (Panels, inverter and batteries) in 2020 and 2021.

    I (like some of you) found in the code where the batteries could be included only if they were used exclusively to store solar energy.  This was the sticking point of the persons like me that felt it might not be possible, because we can also plug into shore power and charge our batteries.   The Tax code is always lagging behind new technology and the common sense fact that no solar panel system can work without having a storage system as part of it.   Beginning 1/1/2023 the batteries were clarified and can now be included.  Tax code is written and when there are conflicts, CPA's and lawyers will argue and then precedent is established as courts make findings.   There was much ambiguity from 2020, 2021,2022.   

    There was (in the discussions) numerous persons confirmed that their CPA's were advising Oliver Owners to claim everything (panels, inverter and batteries), and the several that  have successfully done so and received their tax credits.  In addition, the IRS rules have already clarified this "sticking" point going forward in 2023.    In all these discussions there were a least  a couple that were going to file their personal taxes this weekend (using their trusted CPA) and I hope to hear back from them if there is any new info that comes out of it.   Another point that came out of the discussions is that there is no concern with claiming an Oliver as a "2nd home".

    Prior years the credit was 26%, in 2022 it is 30% and I think 2023 goes back to 26% also.   With a brand new Oliver, where the cost for the solar panels, the inverter and the batteries is very easy to itemize (because Oliver spells it out on your invoice)...  capturing the total cost is easy.   In our case it is $9,500 for the Lithium Pro package... and the sales tax of 7.25% my total cost was $10,189 times a 30% tax credit should equal $3,058.   The form that needs to be filled out is Tax Form 5695 (Residential Energy Credit).    I'm going to file an amended tax return (using that form) and the very worse that could happen is it could be refused... but based on common sense (it's still makes a good argument) and with enough persons that have already successfully done so, I don't think our tax credit will be denied.  

 

[John and Debbie]

22 hours ago, Dave and Kimberly said:

   I have just investigated this very point:   Can we file for a tax credit in regards to the solar panels, inverter and batteries for a newly purchased Oliver.   I was extremely skeptical of the claims (in Oliver Trailer Owners FaceBook group).    In the discussion, I think everyone was an Oliver owner.   One was a licensed CPA with much experience and had researched the tax codes specific to the very questions that Oliver owners were asking.   In addition, there were at least three that had successfully filed (under the advice of professional CPA's) and received their credit for everything (Panels, inverter and batteries) in 2020 and 2021.

    I (like some of you) found in the code where the batteries could be included only if they were used exclusively to store solar energy.  This was the sticking point of the persons like me that felt it might not be possible, because we can also plug into shore power and charge our batteries.   The Tax code is always lagging behind new technology and the common sense fact that no solar panel system can work without having a storage system as part of it.   Beginning 1/1/2023 the batteries were clarified and can now be included.  Tax code is written and when there are conflicts, CPA's and lawyers will argue and then precedent is established as courts make findings.   There was much ambiguity from 2020, 2021,2022.   

    There was (in the discussions) numerous persons confirmed that their CPA's were advising Oliver Owners to claim everything (panels, inverter and batteries), and the several that  have successfully done so and received their tax credits.  In addition, the IRS rules have already clarified this "sticking" point going forward in 2023.    In all these discussions there were a least  a couple that were going to file their personal taxes this weekend (using their trusted CPA) and I hope to hear back from them if there is any new info that comes out of it.   Another point that came out of the discussions is that there is no concern with claiming an Oliver as a "2nd home".

    Prior years the credit was 26%, in 2022 it is 30% and I think 2023 goes back to 26% also.   With a brand new Oliver, where the cost for the solar panels, the inverter and the batteries is very easy to itemize (because Oliver spells it out on your invoice)...  capturing the total cost is easy.   In our case it is $9,500 for the Lithium Pro package... and the sales tax of 7.25% my total cost was $10,189 times a 30% tax credit should equal $3,058.   The form that needs to be filled out is Tax Form 5695 (Residential Energy Credit).    I'm going to file an amended tax return (using that form) and the very worse that could happen is it could be refused... but based on common sense (it's still makes a good argument) and with enough persons that have already successfully done so, I don't think our tax credit will be denied.  

 

 "I'm going to file an amended tax return (using that form) and the very worse that could happen is it could be refused... but based on common sense (it's still makes a good argument) and with enough persons that have already successfully done so, I don't think our tax credit will be denied." 

Thanks Dave or Kimberly for your post.  It makes sense to me that the whole amount could be used for the basis of claiming the 30%.  The point about whether or not it would be excluded because the batteries CAN be charged via shore power and the converter shouldn't matter.  What about people that only boondock and never plug in?  I plan to claim the whole amount also.  If the IRS says no, then I could appeal.  Nothing to lose if I try, but if I don't, then I could be giving them $3000+ that they shouldn't have.

John

[Hokieman]

I took advantage of the solar tax credit on my 2021 taxes.   I used the total amount of the solar package option on my build sheet (solar panels, no inverter and standard Lead-acid batteries).  I also purchased 3 BattleBorn 100AH batteries, and a 140W Zamp portable suitcase system.   All were purchased in 2021, but not at the same time.   Rather than use a tax professional, which I guessed might be reluctant to sign off on it, I tried Turbo Tax Deluxe, since my taxes are very simple.  TT Deluxe returns are reviewed by a tax expert and they guarantee accuracy and will provide legal assistance if audited.  Like John W. and others, I figured worse case, I pay it back.   To my surprise, Turbo Tax walked me right through the credit with simple questions, which I answered honestly.   I received the credit, and have not been audited.   Just throwing this option out there for consideration. 

[taylor.coyote]

I wish everyone good luck if they go down this road. I lived in my trailer for 3 months as my full time home in the bay area to receive medical treatments two years go. I met with my tax accountant on this very issue. He strongly advised me not to claim my solar equipment. This act will no likely pass the straight face test in an audit. The good news: you will likely get away with the claim because the odds of getting audited are low.