Solar Tax Credit

[BigEasy]

Has anyone attempted to obtain the 30% Federal tax credit (IRS form 5695) for solar charging systems. My understanding is the tax credit can apply to primary residences, second homes including boats with live a board amenities as well as RVs. The credit applies to solar panels, mounting frames, charge controllers, installation supplies, batteries, & installation labor. The provision has now been modified to stop at 2025 years end.

 

[dlochner]

Yes. I used it several years ago when I went to solar. Included the panels, mounting frames, controllers and some other odds and ends. Helped to offset the tariffs that were imposed on imported solar panels. I also wasn't audited.

Hurry the credit goes away at the end of this year.

 

[Don S/V ILLusion]

anecdotal story - we know someone who was audited on a last year’s tax credit issue. The IRS didn’t consider his boat use description acceptable as a “residence” which apparently is a prerequisite. I infer from his story that “Live aboard amenities” aren’t synonymous with “live aboard” residency requirements. I’m not a tax lawyer so FWIW….

 

[Charles Erwin]

For solar - the boat does not have to be your 'principal residence' or 'main home.' But you have to use it and it has to be a residence (have head, galley, and sleeping facilities.) For batteries - it has to be 3 Kw hours minimum. There are joint ownership rules. And also note the taxpayer claiming the credit has to be the owner - a revocable trust probably works, but beware where ownership is corporation, irrevocable trust other taxpayer entity. There is a bit more to it than just these few things so here is some reading. Residential Clean Energy Credit | Internal Revenue Service and Instructions for Form 5695 (2024) | Internal Revenue Service. And yes this expires December 2025.

 

[Captain Larry-DH]

Yes - Used it in 2022. It triggered an IRS examination of that portion of the return. They scrutinized it and asked for supporting information including the receipts, a floor plan of the boat (needs to have a bed, a cooking area, a bathroom, etc. to be domicile), dock receipts (must be located a certain distance from the primary residence) pictures of the installation and explanation of each of the components, time spent aboard. It was 100% legitimate, so they approved the deduction in full. Not much stress because my tax reporting is squeaky clean, but time consuming regardless.
Bottom line -- my advice is to make sure you follow the letter of the rules and document it thoroughly.