[RE-wrenches] [RE Marketing] Marketing] Question about Solar Tax Credit basis

Wed Feb 22 05:52:33 PST 2012

So Scott's reply seemed less ambiguous - not a chance for claiming any
"dual use" costs.  Julie's response made me think there is wiggle room -
that the barn/shed built to put an array on top of it instead of building
some ground mount structures would not work without the roof and
therefore, some portion of the structural cost could be included in the
system's basis for figuring the tax credit.  On an intuitive level, this
would be potentially justifiable (not that the tax code is ever
intuitive...).

Our experience supports Scott's take, since a client's 1603 tax grant
application which included some building expenses was denied those
additional grant dollars.  I'm just trying to figure out if there is any
chance for an appeal of that decision, or if the 1603 grant process was
just more stringent in the reading of what I see as ambiguous language
than an audit of the regular tax credit.

Thanks,
Howie
-- 
Howie Michaelson
NABCEP Certified Solar PV Installer™

Catamount Solar, LLC
Renewable Energy Systems Sales and Service
VT Solar Electric & Hot Water Incentive Partner
http://www.CatamountSolar.com
802-272-0004

On Tue, February 21, 2012 11:51 pm, jfh at greenhousepc.com wrote:
> <html><body><span style="font-family:Verdana; color:#000000;
> font-size:10pt;"><div>If someone on re-markets can forward this over to
> Wrenches, that would be helpful.  I'm still not on Wrenches because
> there's no NABCEP certification that I know of for OEMs
> ...<br></div><div><br></div><div><span><font style="clear: both;"
> color="black" face="Arial, Helvetica, sans-serif" size="2"><font
> size="2">> Dual use property is not allowed and would never survive an
> audit. </font> <div><font size="2">> If the solar was on a canopy
> and tools happened to be stored underneath - that's fine - but the
> structure</font></div><div><font size="2">> would have to be open<span
> style="white-space: pre;" mce_style="white-space:pre"> </span>and
> specifically for the solar. - Scott</font></div> <div><font size="2"><br>
> </font></div></font></span>Howie's quote is spot-on, which is what I'd
> expect from SEIA.</div><div><br></div><div>My understanding of the tax
> code goes like this --</div><div><br></div><div>If you put a large
> pole-mount solar array on a piece of dirt, all of labor and materials for
> that is covered.  If you then put asphalt under the array and call it
> a parking lot, the array is still covered, but the asphalt isn't.  If
> the asphalt is for the access roads in a large solar farm, that would be
> covered.<br></div><div><br></div><div>If you start with a parking lot and
> have to dig part of it up to trench in the service conductors, then patch
> it back up, all that is covered.  Ten years later when you repave the
> parking lot, not covered.</div><div><br></div><div>If you build an
> enclosed shed to hold the power equipment, and any batteries, that would
> be covered.  If you make the shed extra large to also hold your
> lawnmower, hedge trimmer, weed-whacker, lawn darts and chainsaw, that
> would not be covered.  The only covered expenses would be from the
> original roof up, and any electrical work back to the last service panel
> that needed work.</div><div><br></div><div>This sentence is the key
> --</div><div><br></div><div><span><font style="clear: both;" color="black"
> face="Arial, Helvetica, sans-serif" size="2"><pre style="font-size: 9pt;"
> mce_style="font-size: 9pt;"><tt>When there is spending on work tied both
> to solar equipment and to other construction -- for example,<br>where the
> solar equipment is being installed during construction of a new building,
> the construction<br>costs will have to be allocated according to each
> activity.</tt></pre></font></span></div><div><br></div><div>If the solar
> power system doesn't work without it, it should be
> allowed.<br></div><div>--<br>Julie Haugh<br>Senior Design
> Engineer<br>greenHouse Computers, LLC // jfh at <a
> href="http://greenhousepc.com">greenhousepc.com</a> // greenHousePC on
> Skype</div><div><br><br></div>
> <blockquote id="replyBlockquote" webmail="1" style="border-left: 2px solid
> blue; margin-left: 8px; padding-left: 8px; font-size:10pt; color:black;
> font-family:verdana;">
> <div id="wmQuoteWrapper">
> -------- Original Message --------<br>
> Subject: Re: [RE Marketing] Marketing] Question about Solar Tax Credit<br>
> basis<br>
> From: Scott Sklar <<a
> href="mailto:solarsklar at aol.com">solarsklar at aol.com</a>><br>
> Date: Tue, February 21, 2012 9:17 pm<br>
> To: <a
> href="mailto:Howie at CatamountSolar.com">Howie at CatamountSolar.com</a>, <a
> href="mailto:re-markets at lists.re-wrenches.org">re-markets at lists.re-wrenches.org</a>,<br>
> <a
> href="mailto:re-wrenches at lists.re-wrenches.org">re-wrenches at lists.re-wrenches.org</a><br>
> <br>
> <font color="black" face="Arial, Helvetica, sans-serif" size="2"><font
> class="Apple-style-span" size="2">Dual use property is not allowed and
> would never survive an audit. </font> <div><font
> class="Apple-style-span" size="2">If the solar was on a canopy and tools
> happened to be stored underneath - that's fine - but the structure would
> have to be open</font></div> <div><font class="Apple-style-span"
> size="2"><span class="Apple-tab-span" style="white-space:pre"> </span>and
> specifically for the solar. - Scott</font></div> <div><font
> class="Apple-style-span" size="2"><br> </font></div> <div><font
> class="Apple-style-span" size="2"><br> </font></div> <div><font
> class="Apple-style-span" size="2">Scott Sklar</font> <div><font
> class="Apple-style-span" size="2"><br> </font></div> <div>  <!--[if gte
> mso 10]> <style>
>  #wmQuoteWrapper /* Style Definitions */ table.MsoNormalTable
> {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0;
> mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:"";
> mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in;
> mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan;
> font-size:12.0pt; font-family:"Times New Roman";
> mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin;
> mso-fareast-font-family:"Times New Roman";
> mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Cambria;
> mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman";
> mso-bidi-theme-font:minor-bidi;}
>
> </style> <![endif]-->  <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">Scott Sklar</span><span style="font-family:
> Arial; "><o:p></o:p></span></font></div> <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">President</span><span style="font-family:
> Arial; "><o:p></o:p></span></font></div> <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">The Stella</span><span style="font-family:
> Arial; "> </span><span style="font-family: Geneva; ">Group,
> Ltd.</span><span style="font-family: Arial;
> "><o:p></o:p></span></font></div> <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">1616 H Street,</span><span
> style="font-family: Arial; "><span style="mso-spacerun: yes"> 
> </span></span><span style="font-family: Geneva; ">N.W., 10th
> floor</span><span style="font-family: Arial;
> "><o:p></o:p></span></font></div> <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">Washington,</span><span style="font-family:
> Arial; "> </span><span style="font-family: Geneva; ">D.C.
> 20006</span><span style="font-family: Arial;
> "><o:p></o:p></span></font></div> <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">DC Phone:  202-347-2214</span><span
> style="font-family: Arial; "><o:p></o:p></span></font></div> <div
> class="MsoNormal" style="font-size:12pt;"><font class="Apple-style-span"
> size="1"><span style="font-family: Geneva; ">VA Phone:</span><span
> style="font-family: Arial; "><span style="mso-spacerun: yes"> 
> </span></span><span style="font-family: Geneva; ">703-522-1195</span><span
> style="font-family: Arial; "><o:p></o:p></span></font></div> <div
> class="MsoNormal" style="font-size:12pt;"><font class="Apple-style-span"
> size="1"><span style="font-family: Geneva; ">E-mail:</span><span
> style="font-family: Arial; "> </span><span style="font-family: Geneva;
> "><a href="mailto:solarsklar at aol.com">solarsklar at aol.com</a>
>            
> </span><span style="font-family: Arial; "><o:p></o:p></span></font></div>
> <div class="MsoNormal" style="font-size:12pt;"><font
> class="Apple-style-span" size="1"><span style="font-family: Geneva;
> ">Websites:</span><span style="font-family: Arial; "> </span><span
> style="font-family: Geneva; "><a
> href="http://www.TheStellaGroupLtd.com">www.TheStellaGroupLtd.com</a></span><span
> style="font-family: Arial; "><span style="mso-spacerun: yes">  
> </span></span><span style="font-family: Geneva; "><a
> href="http://www.StellaCapitalLLC.com">www.StellaCapitalLLC.com</a><o:p></o:p></span></font></div>
> <div class="MsoNormal" style="font-size:12pt;"><span style="font-family:
> Arial; "><o:p><font class="Apple-style-span"
> size="1"> </font></o:p></span></div> <div class="MsoNormal"
> style="font-size:12pt;"><font class="Apple-style-span" size="1"><span
> style="font-family: Geneva; ">The Stella</span><span style="font-family:
> Arial; "> </span><span style="font-family: Geneva; ">Group, Ltd.. is a
> strategic technology optimization and policy firm for clean</span><span
> style="font-family: Arial; "> </span><span style="font-family: Geneva;
> ">distributed energy users and companies, with a focus on system
> standardization,</span><span style="font-family: Arial; "> </span><span
> style="font-family: Geneva; ">modularity, and
> web-enabled diagnostics. Scott Sklar is an Adjunct Professor
> at</span><span style="font-family: Arial; "> </span><span
> style="font-family: Geneva; ">the George Washington University teaching a
> unique multidisciplinary sustainable energy course. On November
> 4,</span><span style="font-family: Arial; "> </span><span
> style="font-family: Geneva; ">2010 Secretary Locke approved
> Sklar's </span><span style="font-family: Arial; "> </span><span
> style="font-family: Geneva; ">appointment to the Department of
> Commerce</span><span style="font-family: Arial; "> </span><span
> style="font-family: Geneva; ">Renewable Energy and Energy Efficiency
> Advisory Committee (RE&EEAC).</span></font><span style="font-size:
> 13pt; font-family: Arial; "><o:p></o:p></span></div> <div
> class="MsoNormal" style="font-size:12pt;; "><span
> style="font-size:13.0pt;font-family:Arial;
> mso-bidi-font-family:Arial"><o:p> </o:p></span></div> <div
> class="MsoNormal" style="font-size:12pt;; "><span
> style="mso-bidi-font-size:12.0pt;font-family:Geneva;
> mso-bidi-font-family:Geneva"> <o:p></o:p></span></div> <br> <br> <div
> style="font-family: helvetica, arial; font-size: 10pt; color: black;
> ">-----Original Message-----<br> From: Howie Michaelson <<a
> href="mailto:howie at suncatchervt.com">howie at suncatchervt.com</a>><br>
> To: RE-wrenches <<a
> href="mailto:re-wrenches at lists.re-wrenches.org">re-wrenches at lists.re-wrenches.org</a>>;
> RE-Markets <<a
> href="mailto:re-markets at lists.re-wrenches.org">re-markets at lists.re-wrenches.org</a>><br>
> Sent: Tue, Feb 21, 2012 11:05 am<br> Subject: [RE Marketing] Question
> about Solar Tax Credit basis<br> <br> <div
> id="AOLMsgPart_0_a6d6bfff-e849-458f-89a3-ce179c4d2d8b" style="margin:
> 0px;font-family: Tahoma, Verdana, Arial, Sans-Serif;font-size: 12px;color:
> #000;background-color: #fff;"> <pre style="font-size: 9pt;"><tt>Hi All,
>
> I know this question has gone around quite a bit before, but somehow I
> can't find the discussion in the archives.  What are folks experience with
> having the tax basis for the 30% tax credit (either residential or
> commercial) incorporate some of the cost of a building that was built
> specifically (in part) to hold a solar array (e.g. a farm shed that is
> designed and built to hold the array, but houses farm equipment as well)
> instead of putting in a ground mount.  I thought it was acceptable to
> claim as part of the tax credit basis the portion of the building cost
> that would have been used on the alternate racking system.  Here is an
> excerpt from "SEIA Guide to Federal Tax Incentives for Solar Energy
> Version 1.2" which could be read as supporting this position:
>
> ________________________________________________
>
> 4. Tax Credit Basis
> The Â“tax credit basisÂ” is the value of the property that you use when
> calculating the amount of the credit. Item 3 in the discussion of the
> commercial tax credit contains a definition of the tax credit basis for
> companies. For residential systems, it appears that the majority of direct
> contractor labor costs to install the equipment are included in the tax
> credit basis. (This includes site preparation, assembly and original
> installation, and piping or wiring work to connect the equipment to the
> individual's home.) When there is spending on work tied both to solar
> equipment and to other construction -- for example, where the solar
> equipment is being installed during construction of a new building, the
> construction costs will have to be allocated according to each activity.
>
> ________________________________________________________________
>
> Thanks,
> Howie
> --
> Howie Michaelson
> NABCEP Certified Solar PV InstallerÂ™
>
> Catamount Solar, LLC
> Renewable Energy Systems Sales and Service
> VT Solar Electric & Hot Water Incentive Partner
> <a href="http://www.CatamountSolar.com"
> target="_blank">http://www.CatamountSolar.com</a>
> 802-272-0004
>
>
>
>
>
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> </tt></pre> </div>  </div> </div> </div>
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