Roofs and Rooftop Solar and the Federal Tax Credit

One issue with installing rooftop solar is the pre-existing condition of the roof.

Even though rooftop panels extend the life of a roof, it’s better to begin with a roof that’s newish, or in good condition. So, in the past few months, several people ended up calling in a roofer while we were together analyzing their solar proposals.

Some of these people have decided to tackle the roof first, and the solar

Image credit: nhenergychoices.com

panels… maybe the following year. Some other people asked us… since there’s a 30% federal tax credit for rooftop solar, could this also apply to the roofing job?  The answer is “maybe.”

The page explaining the Residential Renewable Energy Tax Credit does not specifically mention roofs. It states that “expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home.” Some people consider the new roof, or some part of it, to be on-site preparation.

To obtain this credit you need to fill out IRS Form 5695. Instructions for Form 5695 Residential Energy Credits states that:

“Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. The home doesn’t have to be your main home.”

Not very clear, we agree. One of our co-op members called up his accountant who interpreted the above as…If there’s a structural concern with installing panels on a roof; or there’s a prerequisite repair before the panels can go up; and both jobs are within a reasonable time frame, which we interpret to be within a month or so of each other; then the cost of the roof repair could also, in effect, be reduced by 30% from the tax savings.

As to whether the whole roofing job, or just the area beneath the panels is eligible, we suggest using your own judgement when filing. Be reasonable.

Image credit: maximumwindowprotection.com

If in doubt, please check with your tax advisor. And know that we are not tax advisors, and therefore not liable for this advice.

In this member’s case, the roof didn’t need to be replaced. And he will happily get to include the repairs along with the solar job when he files his 2017 returns.

Currently, we get to reduce our taxes by 30% of the cost of a solar installation. Know that the longer you wait, the more likely that this encouragement will disappear. Here you can see a timeline for the tax credit for homes with solar electric installations, also known as photo-voltaic systems.

• 30% for systems placed in service by 12/31/2019
• 26% for systems placed in service during 2020
• 22% for systems placed in service during 2021
• No plans yet for systems placed in service after 2021

Get ’em while the tax credit lasts…

—

Sun Blessing

Image: wikimedia.org

That what it reveals
we will have no cause
to fear.

That what it illumines
we will greet
with joy.

That each place
where it rises
will be at peace,
and every place
where it sets
will be at rest.

That we will bless
what lives in its path.

That we will blaze
with its gracious light.

From PaintedPrayerBook & JanRichardsonImages, via Viv Hawkins

see your PECO bill online

Ever wondered how much electricity you use in a year? Or how all your energy saving devices actually reflect on your electric bill? You can see this and more at peco.com, even compare your usage with your neighbors. Here’s how:

• You’ll need to setup an online account on your first visit to peco.com.
  1. Go to peco.com
  2. Under the log-in boxes, click Register
  3. Enter your account number, your primary phone number associated to your account and the last 4 digits of the primary account holder’s social security number or business tax id.
  4. You will then need to create a password.
• Once logged in, you can see your current bill, check out the history, enroll in auto pay and other payment options.
• To get a copy of your bill, go to My Bill Details where you’ll see a button that says Download Bill PDF.  Scroll down to bottom of page 2, where you’ll see Your Usage Profile. The Total Annual kWh Usage shown here is used to determine the system size when you inquire about rooftop solar. If possible, print this page 2 when you come to one of our member meetings.  On average, each Pennsylvanian home uses about 10,000 kWh per year. With energy efficient devices, it’s possible to use only about half that.

• You can also see how your energy use compares to neighbors with similar sized homes. You can find this under My Account, then choose My Bill & Usage,  and then click on the neighborhood comparison tab under View Bill Details.
• Want to see your usage over time? To see charts of this overlaid with the average monthly temperature, go to My Account, choose My Bill & Usage,  and then, on the Electric Bill Usage tab, scroll down and click on View detailed usage“.

The site has a lot of other information as well where you’ll discover you can check for outages, even report outages.

Curious about how to use less electricity? You should be when considering investing in solar, since you’ll need fewer panels to generate enough electricity for your needs. See tips for saving energy under Ways to Save.

If you need help deciphering all this data, come to our next member meeting where neighbors await to translate this for your life.