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Ucilia Wang | February 26, 2009 at 1:52 PM 4 Comments

‘Cash for Solar’ Doesn’t Apply to Residential Projects

When we listed the incentives in the $787 billion federal stimulus package two weeks ago, we reported that a provision that would convert the 30 percent investment tax credit into a cash payment for commercial solar projects would also apply to residential solar installations. It turned out the information we received from the Solar Energy Industries Association (SEIA) was incorrect. A rep for the SEIA now tells us there was “some miscommunication down the chain.�

We'd like to thank Kirstin Hoefer, chief marketing officer for Sungevity, a solar installer in Berkeley, Calif., for explaining that residential installations won’t benefit from the cash-payment provision. But they will still get the 30 percent tax credit.

The idea behind turning the tax credit into a grant is to make the money available sooner for large-scale projects. Because of the credit crunch, bankers and other investors have been reluctant to loan money to developers looking to raise millions of dollars to build and operate each solar power plant.

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Comments [4]

  • Rhone Resch 02/26/09 6:43 PM

    Ucilia
    Do by blame SEIA for this misinformation. The information on the stimulus was clearly reported to our members in both our newsletter and our website. Your interpretation of our message, eg. confusing section 48 with section 25 of the tax code is a lack of research on your part and not a misrepresentation of the facts by SEIA.

    Best
    Rhone

     Reply
  • UCILIA WANG 02/26/09 7:27 PM

    Hi Rhone,
    I asked the SEIA media representative specifically whether the cash provision would apply to residential projects, and the answer was a clear yes. I’d be happy to show you the email I received. I did the responsible thing by double checking with the SEIA, which I consider a reliable source. And I was fair by pointing out in the post that there was a miscommunication, not because the SEIA was in the dark about that piece of the legislation.

     Reply
  • john kimball 03/19/09 5:46 PM

    I still believe that the grant is applicable to residential solar applications. Jesse” posted his research and it is very convincing. I will have my accountant look into it. Obviously there is confusion. It;s not over yet.

     Reply
  • Jesse 02/27/09 7:01 AM

    Reading through the tax code, I do not see anything that specifically indicates that this is commercial only.  The Section 1603 of the stimulus bill does reference section 48 of the tax code several times, but none of the specific references I see include language that excludes residential. 

    Please indicate where it specifically excludes residential.  Thanks!

    Sec. 1603 - “...provide EACH person who places in service specified energy property…”

    (d) Specified Energy Property…
      (3) Solar property - ANY property described in clause (i) or (ii) of section 48(a)(3)(A) of such Code.
      Sec. 48 IRS
        (a) 
        (3) (A) which is -
            (i) equipment which uses solar energy to generate
          electricity, to heat or cool (or provide hot water for use
          in) a structure, or to provide solar process heat,
          excepting property used to generate energy for the
          purposes of heating a swimming pool,or
            (ii) equipment which uses solar energy to illuminate
          the inside of a structure using fiber-optic distributed
          sunlight but only with respect to periods ending before
          January 1, 2009,

     Reply

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