Tax implications of solar

Apr 05, 2021 Last reply: 5 years ago 23 Replies

provided, you're paying a net of $1600 for electricity ($2000 paid to Tesla less $400 received). Based on your estimate of $400 received at $.027/kWh sold, you have sold somewhat less than 15000 kWh. If you use 10% of the generated electricity, you're using ~1600 kWh. If you bought the electricity directly, it would cost you 1600*.23 = <$400. It seems to me that you should cancel your contract and have Tesla remove the solar cells.

Would that I could. I had to assume the solar contract signed by the previous owners, and it provides that the contract can only be canceled by buying it out, basically for the net present value of all the money Tesla expects to get until year 20, i.e. for the next 16 years.

Perhaps I'm being too timid, but based on

formatting link
don't really think I could establish a profit motive.

I wasn't trying to suggest that *you* could show a profit motive to deduct the losses, just that with the right set of circumstances, it is possible to do so. It's just another situation where one can't make an absolute statement when it comes to taxes.

Ira Smilovitz, EA Leonia, NJ

As far as I can tell, the major utilities in Northern and Southern CA all use Net Metering. Mr. Brown appears to be stuck with a plan that is no longer sold. Today, Tesla will only sell you (full payment or they will finance a loan) the solar system or you can subscribe if the state allows it. You pay Tesla an amount each month. The amount you pay has nothing to do with being connected to the power grid or the generation or delivery of electrical power from the grid. Tesla gets the investment tax credit. The homeowner can cancel at any time. The homeowner can resubscribe at any time. The homeowner can ask Tesla to remove the panels if they so desire. Tesla will charge for the removal.

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required