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<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>Brian and other PPA vs.
ITC head-scratchers,</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>RE: <FONT size=3><FONT color=#000000><FONT color=#0000ff
size=2>Seems like an awfully large chunk of potential market to ignore over tax
credits.</FONT> <o:p></o:p></FONT></FONT></FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>If you think so, then tell your all-too-smart Solar Lobby
to repent for their historical insistence on rebates & incentives that have
no accountability. This includes <STRONG><U><EM>all forms of capacity-based
incentives &/or tax credits</EM></U></STRONG>, etc. Once they've repented,
then drag their butts down to Capital Hill <EM>(not a mis-spelling)</EM>
and have them remove the ITC from the Corporate Welfare Act of 2008 <EM>(This is
the one that is now in place for how many more years? thereby preventing real
advancement for distributed PV until it is removed!!!!)</EM>. Once all forms of
this are eradicated, then we need to insist on equitable compensation for clean
energy generation via a comprehensive feed-in tariff structure at the national
level. Yes, this means Certified Generation Meters and Data Acquisition Systems,
Time:Load based pricing, No More Net Metering for new projects, National
Interconnection Standard, and a National Right To Interconnect Clean Energy
Sources policy that acknowledges the intrinsic "National Security" benefits of
Distributed Renewable Generation. Since we're down there on Pennsyvania Avenue
kicking in doors, let's make sure that a Carbon Tax becomes mandatory for all
commercially produced sources, at the point of
manufacture/production, and that any form of "Cap & Trade" for
pollution of any kind is forever outlawed by the US Constitution. And, just one
more... Mandate that trade with foreign nations which subscribe to "Cap &
Trade" policies be phased out completely within 5 years unless &
until they revert to actually cleaning up their mess and similarly
outlawing Cap & Trade.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2><STRONG><EM>Until then</EM></STRONG>, HOAs (CIDs) and other
"non-charitable non-profits" are gonna have to figure it out as it applies
in their own specific case. Part of our job as Renewable Energy
Professionals is to help them, where appropriate. </FONT></SPAN><FONT
face=Arial><FONT size=2><FONT color=#0000ff><SPAN class=078361100-30012009>For
this treat, I'll stick to HOAs. </SPAN><SPAN
class=078361100-30012009><FONT>There are certain common things to look for when
talking with them that will help guide in shaping the best strategy. Among these
are the legal structure of the HOA entity, whether or not the HOA "owns" assets,
whether or not the HOA has a tax status, etc.
</FONT></SPAN></FONT></FONT></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial><FONT size=2><FONT color=#0000ff><SPAN
class=078361100-30012009></SPAN></FONT></FONT></FONT> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>The best ones are fairly common and look like this:
</FONT></SPAN><SPAN class=078361100-30012009><FONT face=Arial color=#0000ff
size=2>An HOA <EM>(as a standalone entity)</EM> that is structured
<STRONG><EM>similarly</EM></STRONG> to an LLC operating as a partnership for tax
purposes. They may or may not call themselves an LLC or partnership. We are
looking for the tax relationship of the individual homeowner as it relates to
the "common property". </FONT></SPAN><SPAN class=078361100-30012009><FONT
face=Arial color=#0000ff size=2>Under this structure, the individual homeowners
<EM>(via their real property title) </EM>each own and have responsibility for a
proportional piece of the "common property and expenses". They are are
prohibited by contract from "taking common property with them" when they sell,
which equates to the common property being a "permanent fixture" from a legal
and accounting standpoint, as it relates to the individual
homeowners. </FONT></SPAN><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>Each property owner gets to take their proportionate
share of the ITC off their personal taxes. From a tax accountant's
standpoint, i</FONT></SPAN><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>t works JUST LIKE A CONVENTIONAL PPA LLC STRUCTURE
WORKS FOR THE INVESTORS BEHIND THE CURTAIN except there isn't any
special energy billing required. There also isn't a 6:6:3:1 ratio... 6 Lawyers
for every 6 Accountants for every 3 Engineers for every 1
Wrench.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN><SPAN class=078361100-30012009><FONT
face=Arial color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>Basically, here's how it works: The HOA gets the proposal
together for a purchase of the PV System. <EM>(Not a PPA!) </EM>The
individual homeowners vote to use HOA funds for a Common Area
Improvement. <EM>(Same thing they do when they have to re-roof, only this
time it's Cap-Ex instead of maintenance.)</EM> </FONT></SPAN><SPAN
class=078361100-30012009><FONT face=Arial color=#0000ff size=2>This may or may
not mean they have to shell out additional dues, either in lump sum or
amortized. Either way, the money comes out of the collective pool that every
property owner pays into. </FONT></SPAN><SPAN class=078361100-30012009><FONT
face=Arial color=#0000ff size=2>Essentially, this equates to an
improvement of their individual property as well... One of those intrinsic
things that draws people to condos and gates in the first
place... When the system is completed, each homeowner is provided with a
copy of all the necessary bills and a statement from the HOA secretary /
accountant showing their portion. This should be all they need to take the
deduction and prove the validity if challenged. Most HOAs do this end-of-year
statement thing anyway. Shows contributions, expenses, balance. Some show the
aggregate for the whole CID as well as the individual, others just the
individual stats. The key is that the Solar system cost and homeowner
portion needs to be indicated as a line-item on the statement.
</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>The logical question I think I hear a lot of you asking
right now is: <EM>"How do I figure out if an HOA is setup like
this?"</EM> </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>The simplest way I know is to ask them. Only not
really directly and sounding like a lawyer... Something more like this:
<EM>"When the association needs to make a big improvement, do the
inidividual homeowners get to deduct their portion from their
taxes?"</EM> If you are talking with the right person, this should be the
key qualifying question. If they look at you all puzzled or don't know, then ask
them if you can see a copy of their end-of-year statement for a
clue.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2><EM>(For the uninitiated: LLC = Limited Liability Company.
This is NOT a corporation. Some HOAs are structured as corporations where each
property represents a proportionate # of shares of ownership. Working with them
is "similar" but these setups generally mean there is at least 1 resident lawyer
and 1 resident CPA on the committee to deal with, which means... I don't want to
deal with them. There's just not enough $ in the project to cover the PITA
factor. Besides, lawyers who sit in this committee role are the types
who have dreams about finding black mold in their attics. Contact me
off list if you need a description of PITA.)</EM>
</FONT></SPAN></FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2><SPAN
class=078361100-30012009><EM></EM></SPAN></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2><EM>Disclaimer: The foregoing is the opinion of a guy with
a public high-school education and a hammock. The described method and strategy
has been successfully implemented on numerous occassions in several regions of
the US. It's <STRONG><U>not rocket science</U></STRONG> and <STRONG><U>it is
ethical</U></STRONG>. This strategy</EM> <EM><U><STRONG>does not</STRONG>
</U><STRONG><U>require "sneaky</U>"</STRONG> practices of any kind for
successful implementation. It's a tragedy that more folks haven't figured it out
yet. </EM></FONT></SPAN><SPAN><EM><FONT face=Arial color=#0000ff
size=2>Your experience and situation may vary. So might those
of your clients. You are hereby advised to advise your intended clients to
seek the advice of competent tax professionals before deciding to pursue any
investment path. By the time they get done finding a competent tax professional
and that person gets done reviewing the proposal, </FONT><FONT face=Arial
color=#0000ff size=2>the price of c-Si should be down to $2/watt-peak,
+/- manufacturing tolerances of course. This savings should almost pay for the
cost of a competent tax professional. Did I mention that the foregoing is an
opinion?</FONT></EM></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2>Pray for Sun! During the daytime hours only,
please.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=078361100-30012009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><EM><FONT face="Monotype Corsiva" size=4><STRONG>Matt
Lafferty</STRONG></FONT></EM></DIV>
<DIV align=left><FONT face=Arial size=2><A
href="mailto:gilligan06@gmail.com">gilligan06@gmail.com</A></FONT></DIV>
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