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Qualified fuel cell property (form 5695 line 8)

This year, I added a storage battery to my existing solar roof panels. The solar battery company have listed broken the cost down into an eligible and a non-eligible portion, which are the battery itself and the installation and administration costs. They are saying that only the battery qualifies for the tax credit, and not the other part of the project cost. I believe they're wrong, and the entire cost qualifies, but I would like to verify that with the good folks here.

The instructions for line 8 say "Enter THE AMOUNTS YOU PAID for qualified fuel cell property. See Qualified fuel cell property costs, earlier." [emphasis added]

Qualified fuel cell property costs says "Qualified fuel cell property costs are costs for qualified fuel cell property installed on or in connection with your main home located in the United States. Qualified fuel cell property is an integrated system comprised of a fuel cell stack assembly and associated balance of plant components that converts a fuel into electricity using electrochemical means. To qualify for the credit, the fuel cell property must have a nameplate capacity of at least one-half kilowatt of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%."

My installation meets those criteria, and I see nothing about only the cost of the bare battery being eligible for the 26% tax credit.

Am I missing something, or do I enter the total cost to me on line 8?

Reply to
Stan Brown
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How does a solar panel and a battery fit the definition of a fuel cell? They are different technologies. Maybe you are referring to the wrong tax incentive program.

Reply to
Taxed and Spent

You make a good point. So I need to expand my question:

Solar panels were on the roof when I bought the house. I had the battery installed this year. The battery charges when the sun is shining, and any excess electricity from the panels is sent out on the grid. When the sun is not shining, the house uses electricity from the battery and not from the grid. (In theory, if the battery is exhausted then I take electricity from the grid, but that has not happened since the battery was installed and is unlikely to happen in the future, based on my usage patterns.)

So where on form 5695 do I report the purchase of the battery so as to claim my 26% credit? Or is it a different form? Or did the solar company lie to me, and adding a storage battery to an existing solar system doesn't qualify for a tax credit?

Reply to
Stan Brown

I think I answered my own question.

It appears the IRS considers a battery ("energy storage device") to be solar equipment if the battery derives 100% of its charge from solar cells, which mine does, and even if it is a retrofit installed in a later year than the solar cells, as mine is.

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So that would be line 1 of form 5695.

This article summarizes and links to the relevant revenue letters:

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"... the IRS ruled that the battery is considered to be property which uses solar energy to generate electricity and is, therefore, eligible for the Residential Solar Credit."

Reply to
Stan Brown

You made me look at the form and instructions. Yes, I concur with line 1.

Thanks for posting the links for future reference.

Reply to
Taxed and Spent

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