Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
solar pv tax credit
#1
Trying to get an answer on this from the tax department, but I thought I should also ask this of people here who might have tried what I'm thinking of and have been through the system.

The tax credit is 35% of the cost, capped at $5K "per system" and "per year." Now I gather the administrative definition of "system" has changed over time, having once been defined as a separate connection to the electrical grid, but now defined as up to 5kW in panels, with only one <5kW system eligible per year, and the cost of non-panel components (batteries, etc.) divided between these systems according to the fraction of the systems' kW ratings out of the total. So first, let me know if this is correct so far.

Given that, it seems to me that you can maximize your use of the capped credit by simply installing two separate "systems" in two years; say, in year 1 you put on 6 panels (<5kW) and a small battery, and in year 2 you add 8-10 panels and a couple more batteries. If the cost for each year is around $15K, you'd be eligible for the full $5K credit each year.

Unless, I suppose, they recalculate it the second year to make your total credit what it would have been had you installed the whole thing in year 1. Do they do that? I haven't yet gotten a clear answer on this.
Reply
#2
The year we added permitted solar our CPA at the time figured this out for us. He wasn't located in Hawaii. Your questions are very good, but if it were me I would think the answer might be beyond internet searches.

Whatever the case, I hope you post your conclusions here.
Reply
#3
Always hire a professional to interpret the tax code.

That said, HRS 231-12.5© defines "system" as "any identifiable facility, equipment, apparatus, or the like"; "actual cost" is defined as "including accessories and installation". Adding panels to an existing system would seem to meet those criteria.
Reply
#4
Got confirmation today from the state tax office that my interpretation was correct: as long as the 2nd (or later) year addition to an existing PV systems includes more panels, increasing the kW capacity (and is not an addition of batteries, wiring, etc. alone) then you are eligible again for the full state tax credit. This is definitely the way I'm going to install it then.
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)