IRS approves residential solar for investment tax credit in private letter ruling
In a move hailed by the Energy Storage Association (ESA), the Internal Revenue Service (IRS) has inched closer to formal guidance toward opening residential solar projects to tax credits, by issuing a favorable ruling in a private letter.
In that ruling, the IRS determined that an energy storage retrofit of a residential solar project should be eligible for an investment tax credit of 30 percent. While this is not a formal ruling by any stretch, it does signal a shift in the wind. Unfortunately, it does still leave taxpayers with uncertainty surrounding their ability to utilize the ITC, according to the ESA, something that could stifle investment and growth of industry into the sector.
“Reducing barriers for taxpayers is an important action this Administration can take to continue growing this industry and to create thousands of new jobs,” the ESA said in a responding statement.
The ESA has been pushing hard for the changes of late, and, in particular, has focused its attention on Congress. Aiming for legislative action, they have prevailed upon Congress to clarify energy storage and unlock it as an option for gas power plants, wind turbines, and HVAC systems, as well as solar power.
