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?
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.
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.
So that would be line 1 of form 5695.
This article summarizes and links to the relevant revenue letters:
"... 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."
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