US Fed battery tax credit question + portable panels

[azazel1024]

Looking for advice here, I know systems with 3kwh or greater are eligible (for a few more weeks) for a 30% federal tax credit. Are there any stipulations on that?

I get I'd need a justification if I ever got audited that could pass an auditor sniff test. So my Delta 2, River 2 max, and River 2 plus a 100ah 12v LiFePO4 battery is >3kwh. I have a hard time thinking that would pass a sniff test. Even though my Delta 2 and the 100ah battery ARE used for backup power (and for a multiday outage, I might be dipping into the River 2 max and River 2).

I would like to up my storage game. I am on the fence on what to get and what to do. A Pecron F3000 would be covered. A Delta 2 Max would not. But thoughts on straight facing it with a Delta 2 max and the 100ah battery? Because right now, I have that 100ah battery feeding my Delta 2. If I got a Delta 2 Max, I'd likely have the battery feeding the Delta 2 max. That is >3kwh of power. I probably WOULD look to have that feeding my generator panel and have it setup to switch over to AC power once battery capacity dipped below 20%. And I am looking to PERMANENTLY install solar here at some point. Get comfortable with things. Start defraying costs. If I was running ~1000w of solar on the wood shed I am hoping to build this winter, that would put me at 500w on one Delta 2 Max MPPT input and then I can feed the other 500w into the Victron 100/20 I just got for the 12v battery (or dual input, one to the 75/15 I have and one for the 100/2, but I am not sure I want to run THREE wire runs back to my house from the shed). I could get a peak of ~690w into the Delta 2 max to recharge it, and ~290w to the 100ah battery (I might get yet another Victron and go with a 100/30 if I find that leaves a lot of energy on the table clipping). If I was running something like ~4 320w panels on the shed roof, that should be enough over paneling to get the Delta 2 Max and the 100ah battery recharged on everything except pretty overcast days since my generator panel load is about 3kwh per day.

Anyway, too much talk of what I am thinking of doing. Any thoughts on that?

I am thinking it would be a tougher sell on PORTABLE solar panels to lump that into the credit too. Even if they are used to power the residence in a BACKUP power scenario right now. Any kind of permanently installed solar system is NOT going to make the December 31 cut-off. Too much else to do (I will have some other residential energy tax credit projects done in time, like insulating the attic and crawl space).

 

[robbob2112]

All depends on how nervous you want to be. The instruction book with the reference can be downloaded from the IRS so you can read it yourself and decide.

My recollection is the equipment must be installed on a residence and producing. Now the devil is in the details - is a residence a RV, an apartment, a house? I don't recall it being listed as permanent or not --

Now, when I took it last year I made sure to do screen grabs in the middle of december to show I was producing power from the panels, storing it in batteries and using the power for other stuff... I am covered.

If you won't have it installed and producing I wouldn't take it as that doesn't live up to the letter of the law ---

On the tax form there is only a single line to put the $$ amount you spent to have it done to get the credit. Given the way they have cut the IRS under the current administration the odds of an audit are lower now than they were before, but do you want to fudge and take the chance? Only you can decide.

There are many threads on this topic already with links to the IRS books and different people's takes on things.

 

[fuzzmunky415]

My recollection is the equipment must be installed on a residence and producing.

My CPA and I have an ongoing discussion on this, and he says they're 'Home Improvement' credits (offset your expenses in upgrading the energy efficiency of your home), and the word 'installed' signifies the upgrades are to convey with the property to new owners (you know, a home improvement), so buying an Ecoflow Delta whizbang 4000 for the camper won't cut the mustard.

Residential Clean Energy Credit | Internal Revenue Service

If you invest in renewable energy for your home such as solar, wind, geothermal, biomass, fuel cells or battery storage, you may qualify for a tax credit.

www.irs.gov

 

[azazel1024]

My CPA and I have an ongoing discussion on this, and he says they're 'Home Improvement' credits (offset your expenses in upgrading the energy efficiency of your home), and the word 'installed' signifies the upgrades are to convey with the property to new owners (you know, a home improvement), so buying an Ecoflow Delta whizbang 4000 for the camper won't cut the mustard.

Residential Clean Energy Credit | Internal Revenue Service

If you invest in renewable energy for your home such as solar, wind, geothermal, biomass, fuel cells or battery storage, you may qualify for a tax credit.

www.irs.gov

And I guess that is the question. Mine likely is being installed long term. I am going to be here 20 years though and odds are low it'll convey someday. Though some of this may.

That said, I am looking strongly at installing an Ecoworthy tracker with probably 1200-1600w of panels before the end of the year. I'll just run cable over the ground for now since I can route it out of the way (and don't need to mow until spring!). Those panels are almost certainly going to stay and be permanent. It'll catch the mid-morning through early afternoon sun.

But I don't know what they are feeding. Short term it is likely going to be in to my Delta 2 with a pair of 12v 100ah in series LiFePO4 batteries. Massively over paneled, I know. I plan to power a couple of circuits in my house that are relatively low maximum power draw, but modest energy use (one feeds my networking gear and chest freezer, the other ones is my family room circuit running the big TV, wireless router and cable modem. Between the two circuits my average daily use is 2.1-2.5kwh). Even with losses, etc. I figure being that over paneled, with a tracker, even with my property being pretty wooded, that should pretty easily stand that up with solar providing probably 99+% of the power for that.

Long term I plan to put in another tracker with panels basically right where a giant dead oak tree is on the opposite side of the clearing my house is in to catch the early to late afternoon (or early evening in the summer) sun. But that oak needs to come down first, plus a beechnut tree that is a lot smaller and live.

Lots of other solar projects long term as I'd like to take the house 95-100% off grid eventually (I'll keep my power connection, and I might never take my oven/range off the PoCo feed, as that is 30-50a I don't need to size my inverter(s) for if I leave it on grid and just deal with using 1-3kwh a day for cooking on that).

Something tells me I'll be using that setup for at least a year or two before I look at a more permanent hybrid inverter and battery storage. And I'll trench in the spring for the wiring.

If I don't have time to get the tracker installed before the end of the year, I will almost certainly setup the panels on the lawn and just run it that way for a few weeks.

 

[Rmart30]

My CPA and I have an ongoing discussion on this, and he says they're 'Home Improvement' credits (offset your expenses in upgrading the energy efficiency of your home), and the word 'installed' signifies the upgrades are to convey with the property to new owners (you know, a home improvement), so buying an Ecoflow Delta whizbang 4000 for the camper won't cut the mustard.

Residential Clean Energy Credit | Internal Revenue Service

If you invest in renewable energy for your home such as solar, wind, geothermal, biomass, fuel cells or battery storage, you may qualify for a tax credit.

www.irs.gov

id say thats a very grey area unless it in writing somewhere that they must remain and ive never seen it mentioned in any of the tax credits for solar, water heaters, HVAC, doors, windows etc.

Now that the credits are ending I for sure will be pulling my system (all are ground mount) to take to the next place with me. Around here solar is not going to impress 95% of home buyers and wont raise the appraisal price.

Its sorta like my cpa told me a story cpl yrs ago.
He had a client who bought a new work truck on the last day of the year. The IRS kicked it back and said wasnt a legit deduction for the year because he bought it on the last day and couldnt have "used it" for any work in one day.
The CPA went to court with them and said show us where in the tax code does it say (ie: has to be bought before X date) any time frame, cut off etc? It doesnt. It says must be purchased in the year you are filing on.
And furthermore he brought up that it does say that he could not legally per irs code claim it on the next years filing because it was bought the year before.
The judge ruled against the irs.

 

[azazel1024]

id say thats a very grey area unless it in writing somewhere that they must remain and ive never seen it mentioned in any of the tax credits for solar, water heaters, HVAC, doors, windows etc.

Now that the credits are ending I for sure will be pulling my system (all are ground mount) to take to the next place with me. Around here solar is not going to impress 95% of home buyers and wont raise the appraisal price.

Its sorta like my cpa told me a story cpl yrs ago.
He had a client who bought a new work truck on the last day of the year. The IRS kicked it back and said wasnt a legit deduction for the year because he bought it on the last day and couldnt have "used it" for any work in one day.
The CPA went to court with them and said show us where in the tax code does it say (ie: has to be bought before X date) any time frame, cut off etc? It doesnt. It says must be purchased in the year you are filing on.
And furthermore he brought up that it does say that he could not legally per irs code claim it on the next years filing because it was bought the year before.
The judge ruled against the irs.

Odds are decent whatever I install at my house may be moved to the next one. Though that is ~20 years away, so I am not worrying about it. Around me, I think people value solar a little more, but not by much.

 

[fuzzmunky415]

id say thats a very grey area unless it in writing somewhere that they must remain

Here is the current revision of Instructions for form 5695 wrt:
"Qualified battery storage technology costs.


Qualified battery storage technology costs are costs for battery storage technology that is installed in connection with your home located in the United States and has a capacity of at least 3 kilowatt hours."

I think it's an over-generous reading that a portable plug-in power station qualifies, it's no more 'installed in connection with your home' than your blender. These credits are supposed to offset your expenses in upgrading your home for clean energy and resilience, not provide your travel trailer with power over the summer. Ask yourself why the minimum ('at least') size was 3 kilowatt hours...to prevent portable power stations from being included. The whole discussion will be moot in a few months, but audits will occur for a few years still..

 

[Hedges]

"Installed in connection with your home" doesn't mean bolted to the studs.
A standby generator bolted to a concrete pad, or placed on a rubber pad (which is marketed as an alternative) and hardwire to generator input of your breaker panel seems to be "installed in connection with" (and I take "connection with" to mean "purpose of supplying" not "connected to".)

I think a portable generator with plug-in cord could also be "in connection with", and same for a "solar generator".

Certainly an inverter lying on its back on the garage floor with direct wired connection to breaker panel appears to qualify. Also ground mount PV panels feeding that inverter. Or ballasted plastic panel holders. Loose panels lying on the ground or deck or roof? If wired in, I think so. Have to consider what "installed" means. Secured to any mount or hardwired I would think is installed.

 

[fuzzmunky415]

Secured to any mount or hardwired I would think is installed.

That's why my CPA says 'installed' means a home energy upgrade, that would convey to the new owner.

BTW, he told me an anecdotal story of a house being appraised for so and so dollars, owner spent $40K on grid tie solar, house appraised after solar installed over $90K higher, central valley Cali. Some upgrades still make money, apparently.

 

[Rmart30]

That's why my CPA says 'installed' means a home energy upgrade, that would convey to the new owner.

BTW, he told me an anecdotal story of a house being appraised for so and so dollars, owner spent $40K on grid tie solar, house appraised after solar installed over $90K higher, central valley Cali. Some upgrades still make money, apparently.

Yes, in areas with a lot of people familiar with solar I agree. Denver had tons of easily seen solar everywhere on houses when I was out there.
Down here you rarely see any solar setups. I only know of 3 withen 5 miles of my home, and one of those is just a 10 pc 100w panel set up the guy is powering a small jackery with. Those with no knowledge of solar and its savings wont know its value.

case in point.
My first solar set up was free. Well, almost free. I ended up giving the lady some framing lumber because I felt bad just taking the stuff.
She had bought a cabin on 12 acres. The single older guy had lived in it for about 8 years. Completely off grid power wise with his own solar set up. She saw no value in it and posted the whole system up for free for someone to come take it down.
I obliged.
I ended up with 12 panels and racking, 2 large Epever charge controllers, 2 large Giandel inverters, iirc 28 or 30 lead acid deep cycle batteries, and 2 large full totes of his spare wiring, pv cables, lug ends, etc.
She saw no value in the solar and she ended up paying $10k for the poco line and poles to the cabin, and probably $5k for the excavation co to clear out the path for the power line to come in.

 

[azazel1024]

Here is the current revision of Instructions for form 5695 wrt:
"Qualified battery storage technology costs.


Qualified battery storage technology costs are costs for battery storage technology that is installed in connection with your home located in the United States and has a capacity of at least 3 kilowatt hours."

I think it's an over-generous reading that a portable plug-in power station qualifies, it's no more 'installed in connection with your home' than your blender. These credits are supposed to offset your expenses in upgrading your home for clean energy and resilience, not provide your travel trailer with power over the summer. Ask yourself why the minimum ('at least') size was 3 kilowatt hours...to prevent portable power stations from being included. The whole discussion will be moot in a few months, but audits will occur for a few years still..

Though I asked the question originally, I think the intent is to power the home.

A portable power station, if used to power circuits within the home certainly seems like it would qualify and if you notice, basically all of the large portable power station companies advertise that their 3kwh and above power stations qualify for the credit. I'd think they at least got some advise that the IRS would likely allow it. Which doesn't mean they are never wrong, but there has been a few years now for them to be disabused of that notion by the IRS.

At any rate, my intention IS to install a portable power station, such as to power circuits in my home. To whit, my basement networking equipment and chest freezer and my family room circuit which powers my cable modem, wifi router, and TV.

I am not running extension cords, I plan to wire in a secondary generator panel to run these two circuits right off my Delta 2. If I do pull the trigger on a bigger power station before the end of the year, I might change course and wire in another circuit or two to that.

PS A note to CPAs in general, most major appliance convey with a home and most of them are usually not hardwired into a house. Yes, a seller can CHOOSE not to convey them, but most US real estate markets major appliances like washer, dryer, fridge, oven/range, and dishwasher typically convey with a home. One of those is "attached" to the home, which is a dishwasher. The others are almost universally NOT attached to a home at all.

But there are plenty of other parts of a house that might not convey, that are firmly attached. Having just bought a house, my fiance selling her house, and having purchases and sold several homes, a standard real estate contract includes a lot of things on what does or does not convey. Yes, typically things like "Ceiling fans" convey with a home, a standard real estate contract includes if they do or not and if so home many.

Dehumidifiers (attached or not to the home), etc. And plenty of things not attached to a home CAN convey. It isn't unusual for a buyer or seller to sell/buy as part of the sale of a home a mower or riding mower as an example. Sometimes portable generators. Etc.

 

[fuzzmunky415]

basically all of the large portable power station companies advertise that their 3kwh and above power stations qualify for the credit. I'd think they at least got some advise that the IRS would likely allow it. Which doesn't mean they are never wrong, but there has been a few years now for them to be disabused of that notion by the IRS.

Of course they would, leverage a 'selling point', but the fine print also says consult your tax advisor, so they've covered their ass from their pitch. It was Ecoflow's copious (for them) webpage that led me to ask my CPA, because I was unconvinced a plug in portable PS qualified, and would have been all over it if he felt it did qualify.

I am not running extension cords, I plan to wire in a secondary generator panel to run these two circuits right off my Delta 2. If I do pull the trigger on a bigger power station before the end of the year, I might change course and wire in another circuit or two to that.

This I believe totally qualifies..you're upgrading, and using a 3 kW+ battery to add resiliency to your existing circuits, using a clean energy source. Yes, in theory it's somewhat portable, and can be used elsewhere, but I think you meet the intent of the tax credit. I'll have to harass my CPA again, he's chatty, so no prob. lol

 

[Rmart30]

Of course they would, leverage a 'selling point', but the fine print also says consult your tax advisor, so they've covered their ass from their pitch. It was Ecoflow's copious (for them) webpage that led me to ask my CPA, because I was unconvinced a plug in portable PS qualified, and would have been all over it if he felt it did qualify.

This I believe totally qualifies..you're upgrading, and using a 3 kW+ battery to add resiliency to your existing circuits, using a clean energy source. Yes, in theory it's somewhat portable, and can be used elsewhere, but I think you meet the intent of the tax credit. I'll have to harass my CPA again, he's chatty, so no prob. lol

Id imagine with the reduction in irs agents this year that the number of audits will be way down for the next cpl of years.

 

[robbob2112]

Seems like one of the rules says the storage capacity must be 10kwhrs or more... easy to hit with external batteries, but a small power station won't do it

 

[azazel1024]

Seems like one of the rules says the storage capacity must be 10kwhrs or more... easy to hit with external batteries, but a small power station won't do it

The form and instructions specifically say 3kwh.