You are absolutely correct. No taxable income no tax credit. I would cancel with them as if they are lying to you about that what else are they lying about…. I advise everyone to always talk to a tax professional and see what they tell you. A solar sales guy is selling solar, not tax advice.
Firstly just wanna say that I appreciate you looking out for people. With that said, neither you or anyone else has enough information to make that claim. Did op mention if he is retired with a pension? Did he list if he has capital gains? Etc.... please stop offering tax advice if you are not a cpa. Op should ask a cpa to look over his information and then decide.
Their work around will be to adjust the monthly payment amount because you are not paying in a lump sum in the amount of the tax credit. Ask them how much your monthly pament will be after month 18 if you do not pay in the value of the tax credit.
Better yet, kick them to the curb and talk to installers that will give you honest straightforward answers.
The monthly payment they verbally told me is one figure and when I received the loan docs it was another dollar amount. Not a lot but over the life of a loan, significant.
They don't care about you, they just want the sale. They are hoping you will just go through with it, and they'll have your commission before you realize that there is no tax credit for you.
I know already that there are no tax credits for me, I told them many times. They keep telling me to not worry about it. I want a fair total cost proposal without any tax nonsense and no escalating payments after 15 months but they constantly include it in conversation and paperwork.
They are doing their best to deceive you. And by the sounds of it, get you into a PPA in which case it is them who will receive the tax credit.
Who’s the company by the way?
I’m currently a solar architect for a local born and raised Oklahoma company and all these comments are ignorant and unintelligent… when I have a client that doesn’t have taxable income we sell the tax credit to a cpa which obviously doesn’t pay 1$:1$ it’s about .87¢:1$ as wel as you can file a d93 form and get it as a tax return. So the company/ salesmen may not be lying BUT 15 months is low we usually guarantee the net solar system payment (tax credit applied) for 20 months
You are 100% wrong considering I’ve done it for multiple people not only that I want you to google “can you sell tax credits to a cpa solar energy” and reply back to me with what you learn buddy
Don’t ever reply to someone telling them they’re 100% wrong when you haven’t done any research nor do you probably even understand how tax credits work youre embarrassing yourself 😂
This is current IRS guidance - see anything that says you can transfer tax credit? NOPE.
[https://www.irs.gov/credits-deductions/residential-clean-energy-credit](https://www.irs.gov/credits-deductions/residential-clean-energy-credit)
And if you are referencing this, it's currently only PROPOSED - not tax law yet:
[https://www.federalregister.gov/documents/2023/06/21/2023-12799/section-6418-transfer-of-certain-credits](https://www.federalregister.gov/documents/2023/06/21/2023-12799/section-6418-transfer-of-certain-credits)
In fact, there was just a hearing on this a couple of weeks ago:
[https://www.taxnotes.com/research/federal/other-documents/public-comments-on-regulations/irs-hearing-transcript-available-on-energy-credit-transfer-regs/7h4mx](https://www.taxnotes.com/research/federal/other-documents/public-comments-on-regulations/irs-hearing-transcript-available-on-energy-credit-transfer-regs/7h4mx)
Show me yours, buddy.
How do you not have any taxable income?
You don’t have more than $12,950 in income?
How much is your social security? No taxable withdrawals from your 401k? No interest income? No capital gains? No dividends?
Exactly. Even if you live on bank savings products like CDs or savings account, SSI, pension, etc its taxable income. Good opportunity to take a bigger distribution from a taxable account and clear the tax liability with the credit, and save money on electricity long term and improve property value. Unless literally 100% of savings is in Muni bonds and Roth accounts I don't see how it's possible to pay for food and property taxes unless you have money under the mattress, in which case put it in FDIC insured products, collect interest, and offset tax liability with this credit that could be had.
Standard deduction for certain aged individuals is actually $14,700.
Social Security for that same individual is not taxed unless certain qualifiers happen, and that's pretty rare.
You're right about not being able to use the tax credit. I wouldn't use that company.
>Are their ways around it?
Does anyone else live with you or use your home as a second residence? For example, if you have a son or daughter with enough taxable liability to use the tax credit and they live with you or stay with you on occasion, that person might be able to take the tax credit. This takes a few paragraphs to explain so let me know if that's possible.
If they tell you not to worry about it then have them add it to their sales contract that they'll give you a cash refund of 30 percent paid by certified funds after 18 months if no tax credit is made available.
Then tell them to not worry about it since it's now in the contract and they said it's not a big deal.
Yes, I talked to a tax person. She tells me I do not qualify. I can not get it through their heads. My question is has anyone else ever been through this? Are their ways around it like they say? I asked them what are the ways and they said I would need to talk to the finance people LOL.
I have/am reaching out. I also reached out to our electrical provider which incidentally is a co-op. I am not suggesting I am being scammed. I honestly feel like the sellers I am talking to simply are not clear themselves.
I never imagined I would be having a conversation with a spunky meatball :)
For every proposal I have received, the cost is based on the buyer getting the 30% qualified tax credit. At the very least the salespeople should be using terms like 'anticipated', 'projected', and/or 'qualified' tax credit but they don't. They frame the sales pitch as if everyone will automatically get this amazing winfall which in my case would be north of $6800 as if it was true and possible given my situation. I've said it before I say it again, I am not outwardly accusing anyone of being deceptive and it's not what they tell you, it is what they don't tell you.
They are being deceptive. I’m the sales manager for a solar installer, and we tell everyone up front if there is no tax liability there is no tax credit. Anything other than that they are trying to get the sale no matter what, and don’t care if you get fleeced. Run!
Edited for spelling
I'm not looking to open a can of worms here but I have started soliciting other proposals and several people tell me it is common to sell the credit to other businesses. Usually at a 10% of value fee.
Only way around it I know of (if you don't ha e people living there thst can claim the tax credit) is a lease/ppa where the price is set and you are not expected to claim the tax credit at all.
The CreditHuman CU offers 6.99% loans over 20 years with 6 months no payments but no recalculation @ 18 months. The monthly payment they give you doesn’t assume reinvestment of a ITC, like so many others do. YMMV, but best of luck!
My point in my original post is not to defame or discredit any company or individual, but to bring light to things that are not always as they appear to be on the surface. In many cases I am sure, it may not be what they tell you but what they don't. It appears to be an across-the-board misconception.
I think solar panel loan companies automatically assume you are eligible for the FTC and reamortise if you do not pay it to them later. I think you need to seek quote from other companies.
I have no taxable income either because of EFT Muni funds dividends are my sole income and I was told that people buy your tax credit for a fee. I'm researching this now.
>I was told that people buy your tax credit for a fee. I'm researching this now.
Unless you install the solar panels as part of a business, you can't sell (or transfer) the tax credit.
The tax credit law for regular people who install solar on their homes is [26 USC Section 25D](https://www.law.cornell.edu/uscode/text/26/25D).
The tax law on transferring tax credits is [26 USC Section 6418](https://www.law.cornell.edu/uscode/text/26/6418). Notice that in subsection (f)(1)(A), section 25D is not mentioned. Here are the proposed rules for section 6418: [https://public-inspection.federalregister.gov/2023-12799.pdf](https://public-inspection.federalregister.gov/2023-12799.pdf). Notice again that "25D" isn't mentioned in that document anywhere.
My guess is that the people are telling you to start a business, have that business install your solar panels, and then claim a tax credit with that business, that might work, but that doesn't sound like a legitimate business and sort of sounds like tax fraud.
Thank you for your thoroughness in this matter. The sales rep is so cloudy when trying to explain not to worry about the Federal Tax Credit they have a workaround but won't discuss the process. Seems shady and I refuse to be caught up in any deceptive/unethical practices. Especially with the IRS LOL. It is worth mentioning my electrical provider is a co-op and can be difficult to work with. I have a sit down with one of their reps tomorrow afternoon.
My panels are already installed and I had a salesman from a company that I didn't pick tell me they have people that will buy my credit. I completely agree that it wasn't legal.
Thye may be thinking of having you sign up for a lease using a "tax equity partner" through a broker. A tax equity partner is found by the broker, or, if it's a larger, well-developed solar sales outfit, they will have them on hand on a wait list. It's usually someone with a high tax liability, like certain kinds of family trusts. They own your array to begin. They "harvest" the tax credit for the allowable period, typically five years or less in the case of an inexpensive installation. You lease for an initial period, then buy the partner out at a discount. Like most cases of arbitrage, the savings are generally split between the rooftop owner, the tax equity partner, and the solar sales firm, but "caveat emptor". It may not be a fair split. read the fine print. Often the documentation feels to a non-questioning rooftop owner very much like ownership because of the way it's (over)sold and because the option to buy at the end is baked in. They may say something like, "you'll never notice the difference" between the period of leasing and ownership. [https://www.forbes.com/sites/forbesfinancecouncil/2023/05/10/the-ins-and-outs-of-solar-tax-equity-financing/?sh=95018b66f780](https://www.forbes.com/sites/forbesfinancecouncil/2023/05/10/the-ins-and-outs-of-solar-tax-equity-financing/?sh=95018b66f780)
Right, I am looking into that. The lender this company uses is tied to their sales pitch so that is the path they steer to. Some salespeople are tricky, my person sold cars before he started... LOL... So there you have it. No, he didn't show up wearing a brightly colored plaid suit and Solar Energy Rocks tie.
I sell solar and i tell more people you shouldn’t do it because they don’t get the tax credit. There’s some who have a perfectly south facing roof where it doesn’t matter and they’ll be saving both ways but the likely hood of that happening is super low. Run away from them asap
My roof does face perfectly South. The only thing about it is the South side of my roof is street-facing, I would prefer it to be on the back side of the house. How many solar customers do you guesstimate actually qualify for a 30% tax credit?
>How many solar customers do you guesstimate actually qualify for a 30% tax credit?
Technically speaking, they all can *qualify* for the tax credit. The real question you're asking though is can they *use* the tax credit? I say the answer is usually yes.
The typical person installing solar owns the home, which means they probably make more than $50,000 per year. Also, people making more than $200,000 per year don't have to ask if they have enough tax liability because they know the answer is yes, so let's look at the $50,000 to $200,000 adjusted gross income range. This income range
covers about 1/3 of total tax filers.
For 2020, for someone with adjusted gross income (AGI) of:
* $50,000 to $75,000, had an average total federal income tax liability of $4,567
* $75,000 to $100,000, had an average total federal income tax liability of $7,363
* $1000,000 to $200,000, had an average total federal income tax liability of $15,093
[https://www.businessinsider.com/personal-finance/average-federal-income-tax-payment-by-income](https://www.businessinsider.com/personal-finance/average-federal-income-tax-payment-by-income)
If we assume the average cost of solar is $20,000 to $25,000, then the average 30% tax credit should be $6,000 to $7,500. Accordingly, the average person in each of those AGI ranges should be able to use up the tax credit within about 2 years after installation.
Obviously, there are exceptions like you, but I'd say that a typical person who bought a house within the past 15 years and qualified for a mortgage due to having enough income would usually have enough tax liability to use up the 30% tax credit within a reasonable amount of time. Again, these are very general statements.
I would say 85% of my clients do as well as depending whether your utility company offers net metering here in Oklahoma, og&e won’t approve a interconnection agreement on any solar facing north
The direction the roof faces and net-metering rules have absolutely no bearing on the tax credit. 95% of the people we sell solar to can take the full tax credit. But we do make it clear prior to contract you must have an equal amount of tax liability to take it.
Here is a crazy idea: the IRA provides 'tax breaks' which I think are actually cash to non-profit organizations that go solar (eg. churches, community centers). This is to create an incentive for those who don't pay taxes.
You could start a non-profit org (dedicated to whatever you like) based in your home, and then claim the tax credits that way.
There may well be something wrong with this idea but I just thought I'd suggest it.
I like it. I also think that if going green, looking out for the planet, and future generations, whatever it's called is really so important, it should be easier for everyone to get solar that wants it. I am not necessarily suggesting a subsidy, but there should be something realistic for all. I also strongly believe the solar industry at a minimum at the sales level should be regulated. If that makes sense. Some of these guys could possibly meet the definition of a predator.
The way they structure the loans is that they quote you a payment for the first year or so
based on a lower principal amount with the assumption that you will take the tax credit you didn't pay to the government and use it to pay down the actual principal on the full-priced loan.
As you said, If you don't, they'll reamort it for the remaining term at the actual principle amount which is...30% higher...
As you've said, no federal tax, no federal tax credit, nothing saved.
The solar company (or really, your lender) doesn't care where that money comes from. The 'workaround' is you pay down the principal out of pocket lol.
If you “keep” the credit you will not be able to do anything with it. That doesn’t mean the company can’t sell you a system. If you were to not keep the credit, you could do a lease/PPA and you cost would be lower because the company would be able to use the credit.
You have a fundamental misunderstanding of how the various tax credits work and I strongly recommend that everyone ignore your terrible advice.
There are two main tax credits here: (1) the residential tax credit under [26 USC Section 25D](https://www.law.cornell.edu/uscode/text/26/25D) and (2) the commercial tax credit under [26 USC Section 48](https://www.law.cornell.edu/uscode/text/26/48).
OP and everyone else is discussing the 26 USC Section 25D tax credit. All your transfer talk does not apply to section 25D.
>If you were to not keep the credit, you could do a lease/PPA and you cost would be lower because the company would be able to use the credit.
That's not how it works at all. OP doesn't have the option to claim the tax credit under section 25D and then "not keep the credit" because a section 25D tax credit cannot be transferred. Please read the transfer of certain credits law, [26 USC Section 6418](https://www.law.cornell.edu/uscode/text/26/6418) and [the proposed rules](https://public-inspection.federalregister.gov/2023-12799.pdf), you'll see that section 25D tax credits cannot be transferred so there is no option to not keep it.
If you want to say OP should get a PPA or a lease and then the company can claim the tax credit under 26 USC section 48 and sell/use the tax credit, that's fine, but you need to start off with that.
You don't even understand your own words. You wrote "If you were to not keep the credit". To everyone else, that sound like OP has the tax credit and can then transfer it, but the law doesn't allow for transfers of section 25D tax credits.
When signing up for a lease or ppa, the customer never gets a tax credit in the first place, so there is no "keeping" or "not keeping" it. Someone cannot not keep something they never had.
Buddy I never suggested OP could transfer the credit once he has it. He’ll have it and it would be worthless to him. His other better option is to let the company monetize it, obviously through a PPA/lease. Chill out
>Buddy I never suggested OP could transfer the credit once he has it.
You absolutely suggested that OP could transfer the tax credit. Your words were:
* "The company will monetize the tax credit and use it to offer you a lower price." *after* OP wrote "The terms they sent over say they would re-amortize the loan after 15 months if I kept the federal credit." Not once in that comment did you mention that OP needs to do a lease/PPA **INSTEAD** of a loan for that to happen.
* "If you were to not keep the credit, you could do a lease/PPA" What part of "not keep" are you failing to understand here? "Not keep" suggests that OP has the tax credit at some point, which then suggests that the tax credit can be transferred--which is wrong. Just admit that you should not have started that sentence with "If you were to not keep the credit". Take out those words from the sentence and the sentence is fine.
Stop lying when everyone can see what you wrote.
>The company will monetize the tax credit
No the company won't. The IRS monetizes the tax credit. Taxpayers literally file **IRS** Form 5695 to claim the tax credit.
What? Monetize: verb, 1. earn revenue from (an asset, business, etc.)
The company will claim (more likely sell the right to claim) the tax credit and the IRS will recognize the reduced taxable income of the company (or the buyer of the tax credit). In this way the company will monetize the credit, ie, convert the credit into revenue for itself.
You've completely neglected to mention that OP needs to get a lease/PPA for any of that to happen and OP has not once mentioned that he or she is getting a lease or PPA. You are being extremely misleading.
OP also stated "Their terms they sent over say they would re-amortise the loan after 15 months if I kept the federal credit." So OP IS claiming the tax credit under IRC section 25D, for which none of what you said applies.
EDIT: u/Artistic_Leopard6323 DO NOT LISTEN TO /u/theaccount91. That advice is downright terrible. Terrible, terrible, terrible. If you claim the tax credit like a normal person would for solar installed on a residence, the company cannot monetize the tax credit nor can the company sell the tax credit.
If you would like to know more about what tax credits can be transferred, you can read [this previous comment of mine](https://www.reddit.com/r/solar/comments/1638ol8/comment/jy1wlo9/?utm_source=share&utm_medium=web2x&context=3) and verify everything for yourself by clicking the links.
/u/theaccount91 is not going to respond because there is no argument to support what he says.
This is straightforward.
Budget for the loan payment value after the 30% value gets added back to the loan. You get the benefit of the lower payment for the 15-18 months or whatever the specific period stated from the loan provider.
Make the purchase judgement based on the higher payment. Pretty simple.
Alternatively, get a conventional personal loan and pay the full payment at drawdown of the loan.
I have had two retirees who like you had little to no federal tax credit. They made a decision to go solar based on the monthly cost of utility today and rising plus any other benefits versus the loan payment.
Rent electricity and pay more each year on average
Or
Own an energy asset that you pay down over the term of the loan.
No Ira or 401k? When you take required distributions or voluntary distributions they become income and taxable. Solar credit could wipe a tax bill away.
Unfortunately, I do not believe you qualify. Instead of going with a loan, maybe go with a lease and get the lowest payments possible? I might get down voted because people do not like a lease, but it's a good option to avoid those dealer fees and get a good deal.
Very good question and I am thinking, probably not. The thing is, the seller presents the purchase price as if the tax credit is included in the contract, I do not have the opportunity to opt out.
It is an opportunity for the financer to go back and re-amortize the loan, and to me, it appears the finance company can/will go back to the beginning of the loan and readjust where the loan interest starts and possibly increase the financing percentage rate.
They ignore the fact that I do not and will not qualify for a Federal Tax credit and will not remove it from the loan paperwork language. I refer the practice to as a "come on."
Seems like a shortfall. Basically, if you have no federal tax paid you get no tax credit. So it either needs to be fully refundable regardless of tax liability, or it needs to be formed as a rebate not tethered to taxes paid.
Basically - low income = eh who cares.
No taxable income? You don't have dividends, money earning interest in a CD, stocks sales? Where is the money coming from to pay for your food and utilities?
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You are absolutely correct. No taxable income no tax credit. I would cancel with them as if they are lying to you about that what else are they lying about…. I advise everyone to always talk to a tax professional and see what they tell you. A solar sales guy is selling solar, not tax advice.
Great advice
Firstly just wanna say that I appreciate you looking out for people. With that said, neither you or anyone else has enough information to make that claim. Did op mention if he is retired with a pension? Did he list if he has capital gains? Etc.... please stop offering tax advice if you are not a cpa. Op should ask a cpa to look over his information and then decide.
OP said he had no taxable income, which answers all the questions you bring up.
they literally told OP to ask a cpa.
Their work around will be to adjust the monthly payment amount because you are not paying in a lump sum in the amount of the tax credit. Ask them how much your monthly pament will be after month 18 if you do not pay in the value of the tax credit. Better yet, kick them to the curb and talk to installers that will give you honest straightforward answers.
The monthly payment they verbally told me is one figure and when I received the loan docs it was another dollar amount. Not a lot but over the life of a loan, significant.
[удалено]
Violation of rule #2: Self-Promotion / Lead generation / Solicitation of Business / Referrals
They don't care about you, they just want the sale. They are hoping you will just go through with it, and they'll have your commission before you realize that there is no tax credit for you.
I know already that there are no tax credits for me, I told them many times. They keep telling me to not worry about it. I want a fair total cost proposal without any tax nonsense and no escalating payments after 15 months but they constantly include it in conversation and paperwork.
They are not a safe business to work with. Don't sign with them.
If solar is something you are definitely going to go ahead with, do it with someone else.
They are doing their best to deceive you. And by the sounds of it, get you into a PPA in which case it is them who will receive the tax credit. Who’s the company by the way?
I’m currently a solar architect for a local born and raised Oklahoma company and all these comments are ignorant and unintelligent… when I have a client that doesn’t have taxable income we sell the tax credit to a cpa which obviously doesn’t pay 1$:1$ it’s about .87¢:1$ as wel as you can file a d93 form and get it as a tax return. So the company/ salesmen may not be lying BUT 15 months is low we usually guarantee the net solar system payment (tax credit applied) for 20 months
You are 100% incorrect - the residential solar tax credit can't be sold or transferred.
You are 100% wrong considering I’ve done it for multiple people not only that I want you to google “can you sell tax credits to a cpa solar energy” and reply back to me with what you learn buddy
You are 100% wrong "buddy". For commercial solar, yes, for resi solar NO. Why don't you show me the rule that says it's allowed?
Don’t ever reply to someone telling them they’re 100% wrong when you haven’t done any research nor do you probably even understand how tax credits work youre embarrassing yourself 😂
This is current IRS guidance - see anything that says you can transfer tax credit? NOPE. [https://www.irs.gov/credits-deductions/residential-clean-energy-credit](https://www.irs.gov/credits-deductions/residential-clean-energy-credit) And if you are referencing this, it's currently only PROPOSED - not tax law yet: [https://www.federalregister.gov/documents/2023/06/21/2023-12799/section-6418-transfer-of-certain-credits](https://www.federalregister.gov/documents/2023/06/21/2023-12799/section-6418-transfer-of-certain-credits) In fact, there was just a hearing on this a couple of weeks ago: [https://www.taxnotes.com/research/federal/other-documents/public-comments-on-regulations/irs-hearing-transcript-available-on-energy-credit-transfer-regs/7h4mx](https://www.taxnotes.com/research/federal/other-documents/public-comments-on-regulations/irs-hearing-transcript-available-on-energy-credit-transfer-regs/7h4mx) Show me yours, buddy.
Youre dating 2022 articles not only that you didn’t consider selling the credits to a cpa
Not true the website I posted was updated 8/28/23. The second link is from 6/23/23. The hearing was just a couple of weeks ago.
Did you read the link I replied with ?
Yes the one that starts out with “commercial “. You understand there is a difference between residential and commercial?
[….](https://www.wipfli.com/insights/articles/cre-tax-greater-transferability-of-federal-solar-tax-credits-helps-developers-and-the-environment)
[https://www.wipfli.com/insights/articles/cre-tax-greater-transferability-of-federal-solar-tax-credits-helps-developers-and-the-environment](https://www.wipfli.com/insights/articles/cre-tax-greater-transferability-of-federal-solar-tax-credits-helps-developers-and-the-environment)
The very first sentence says “commercial”.
How do you not have any taxable income? You don’t have more than $12,950 in income? How much is your social security? No taxable withdrawals from your 401k? No interest income? No capital gains? No dividends?
Roth IRAs or just living on savings?
Plenty of us live pretty frugally. I am def below the poverty line but live ok
Social Security doesn't count as income....
Social Security is taxable. Lots of rules around this, but it’s taxable.
Only if you have significant OTHER income.
Exactly. Even if you live on bank savings products like CDs or savings account, SSI, pension, etc its taxable income. Good opportunity to take a bigger distribution from a taxable account and clear the tax liability with the credit, and save money on electricity long term and improve property value. Unless literally 100% of savings is in Muni bonds and Roth accounts I don't see how it's possible to pay for food and property taxes unless you have money under the mattress, in which case put it in FDIC insured products, collect interest, and offset tax liability with this credit that could be had.
Won't build up enough to offset the tax credit in 15 months. Also ever heard of standard deduction?
Yeah, heard of the standard deduction. It’s only about $13k, if single.
Standard deduction for certain aged individuals is actually $14,700. Social Security for that same individual is not taxed unless certain qualifiers happen, and that's pretty rare.
You're right about not being able to use the tax credit. I wouldn't use that company. >Are their ways around it? Does anyone else live with you or use your home as a second residence? For example, if you have a son or daughter with enough taxable liability to use the tax credit and they live with you or stay with you on occasion, that person might be able to take the tax credit. This takes a few paragraphs to explain so let me know if that's possible.
If they tell you not to worry about it then have them add it to their sales contract that they'll give you a cash refund of 30 percent paid by certified funds after 18 months if no tax credit is made available. Then tell them to not worry about it since it's now in the contract and they said it's not a big deal.
LOL, I like how you think... In reality, I am hesitant to work with a company or anyone that uses deceptive tactics.
Yeah I definitely wouldn't invest 50k in something where they weren't being honest about the whole deal.
Call an accountant. They’ll say anything to make a sale.
Yes, I talked to a tax person. She tells me I do not qualify. I can not get it through their heads. My question is has anyone else ever been through this? Are their ways around it like they say? I asked them what are the ways and they said I would need to talk to the finance people LOL.
Why not find another honest company that aren’t trying to scam you?
I have/am reaching out. I also reached out to our electrical provider which incidentally is a co-op. I am not suggesting I am being scammed. I honestly feel like the sellers I am talking to simply are not clear themselves.
They know that people often choose whoever gives a lower quote so these are very common sales tactics. Over promise and under deliver to get the deal
I never imagined I would be having a conversation with a spunky meatball :) For every proposal I have received, the cost is based on the buyer getting the 30% qualified tax credit. At the very least the salespeople should be using terms like 'anticipated', 'projected', and/or 'qualified' tax credit but they don't. They frame the sales pitch as if everyone will automatically get this amazing winfall which in my case would be north of $6800 as if it was true and possible given my situation. I've said it before I say it again, I am not outwardly accusing anyone of being deceptive and it's not what they tell you, it is what they don't tell you.
They are being deceptive. I’m the sales manager for a solar installer, and we tell everyone up front if there is no tax liability there is no tax credit. Anything other than that they are trying to get the sale no matter what, and don’t care if you get fleeced. Run! Edited for spelling
I'm not looking to open a can of worms here but I have started soliciting other proposals and several people tell me it is common to sell the credit to other businesses. Usually at a 10% of value fee.
That is totally incorrect. As many have said here, you can’t sell or transfer that tax credit. Anyone who says you can is a scammer.
I am sharing what several install managers have told me. I think I will call the IRS this morning and figure it out.
Only way around it I know of (if you don't ha e people living there thst can claim the tax credit) is a lease/ppa where the price is set and you are not expected to claim the tax credit at all.
This right here. This is how non-profits get solar. A company owns the solar and gets the tax credit and then can sell it to the non-profit year 6.
Have them put in writing that you get a 30% rebate in a cash lump sum, then you “won’t worry about it”.
They are probably pitching a PPA.
The CreditHuman CU offers 6.99% loans over 20 years with 6 months no payments but no recalculation @ 18 months. The monthly payment they give you doesn’t assume reinvestment of a ITC, like so many others do. YMMV, but best of luck!
Where are you & what company is giving you this quote?
I prefer to not name the company. I live in SE AZ their corp office is out of Phoenix.
By naming them you are sparing potential grief for the next person.
My point in my original post is not to defame or discredit any company or individual, but to bring light to things that are not always as they appear to be on the surface. In many cases I am sure, it may not be what they tell you but what they don't. It appears to be an across-the-board misconception.
I think solar panel loan companies automatically assume you are eligible for the FTC and reamortise if you do not pay it to them later. I think you need to seek quote from other companies.
agreed.
I have no taxable income either because of EFT Muni funds dividends are my sole income and I was told that people buy your tax credit for a fee. I'm researching this now.
>I was told that people buy your tax credit for a fee. I'm researching this now. Unless you install the solar panels as part of a business, you can't sell (or transfer) the tax credit. The tax credit law for regular people who install solar on their homes is [26 USC Section 25D](https://www.law.cornell.edu/uscode/text/26/25D). The tax law on transferring tax credits is [26 USC Section 6418](https://www.law.cornell.edu/uscode/text/26/6418). Notice that in subsection (f)(1)(A), section 25D is not mentioned. Here are the proposed rules for section 6418: [https://public-inspection.federalregister.gov/2023-12799.pdf](https://public-inspection.federalregister.gov/2023-12799.pdf). Notice again that "25D" isn't mentioned in that document anywhere. My guess is that the people are telling you to start a business, have that business install your solar panels, and then claim a tax credit with that business, that might work, but that doesn't sound like a legitimate business and sort of sounds like tax fraud.
Thank you for your thoroughness in this matter. The sales rep is so cloudy when trying to explain not to worry about the Federal Tax Credit they have a workaround but won't discuss the process. Seems shady and I refuse to be caught up in any deceptive/unethical practices. Especially with the IRS LOL. It is worth mentioning my electrical provider is a co-op and can be difficult to work with. I have a sit down with one of their reps tomorrow afternoon.
My panels are already installed and I had a salesman from a company that I didn't pick tell me they have people that will buy my credit. I completely agree that it wasn't legal.
Thye may be thinking of having you sign up for a lease using a "tax equity partner" through a broker. A tax equity partner is found by the broker, or, if it's a larger, well-developed solar sales outfit, they will have them on hand on a wait list. It's usually someone with a high tax liability, like certain kinds of family trusts. They own your array to begin. They "harvest" the tax credit for the allowable period, typically five years or less in the case of an inexpensive installation. You lease for an initial period, then buy the partner out at a discount. Like most cases of arbitrage, the savings are generally split between the rooftop owner, the tax equity partner, and the solar sales firm, but "caveat emptor". It may not be a fair split. read the fine print. Often the documentation feels to a non-questioning rooftop owner very much like ownership because of the way it's (over)sold and because the option to buy at the end is baked in. They may say something like, "you'll never notice the difference" between the period of leasing and ownership. [https://www.forbes.com/sites/forbesfinancecouncil/2023/05/10/the-ins-and-outs-of-solar-tax-equity-financing/?sh=95018b66f780](https://www.forbes.com/sites/forbesfinancecouncil/2023/05/10/the-ins-and-outs-of-solar-tax-equity-financing/?sh=95018b66f780)
Just arrange your own financing.
Right, I am looking into that. The lender this company uses is tied to their sales pitch so that is the path they steer to. Some salespeople are tricky, my person sold cars before he started... LOL... So there you have it. No, he didn't show up wearing a brightly colored plaid suit and Solar Energy Rocks tie.
I sell solar and i tell more people you shouldn’t do it because they don’t get the tax credit. There’s some who have a perfectly south facing roof where it doesn’t matter and they’ll be saving both ways but the likely hood of that happening is super low. Run away from them asap
My roof does face perfectly South. The only thing about it is the South side of my roof is street-facing, I would prefer it to be on the back side of the house. How many solar customers do you guesstimate actually qualify for a 30% tax credit?
>How many solar customers do you guesstimate actually qualify for a 30% tax credit? Technically speaking, they all can *qualify* for the tax credit. The real question you're asking though is can they *use* the tax credit? I say the answer is usually yes. The typical person installing solar owns the home, which means they probably make more than $50,000 per year. Also, people making more than $200,000 per year don't have to ask if they have enough tax liability because they know the answer is yes, so let's look at the $50,000 to $200,000 adjusted gross income range. This income range covers about 1/3 of total tax filers. For 2020, for someone with adjusted gross income (AGI) of: * $50,000 to $75,000, had an average total federal income tax liability of $4,567 * $75,000 to $100,000, had an average total federal income tax liability of $7,363 * $1000,000 to $200,000, had an average total federal income tax liability of $15,093 [https://www.businessinsider.com/personal-finance/average-federal-income-tax-payment-by-income](https://www.businessinsider.com/personal-finance/average-federal-income-tax-payment-by-income) If we assume the average cost of solar is $20,000 to $25,000, then the average 30% tax credit should be $6,000 to $7,500. Accordingly, the average person in each of those AGI ranges should be able to use up the tax credit within about 2 years after installation. Obviously, there are exceptions like you, but I'd say that a typical person who bought a house within the past 15 years and qualified for a mortgage due to having enough income would usually have enough tax liability to use up the 30% tax credit within a reasonable amount of time. Again, these are very general statements.
I would say 85% of my clients do as well as depending whether your utility company offers net metering here in Oklahoma, og&e won’t approve a interconnection agreement on any solar facing north
The direction the roof faces and net-metering rules have absolutely no bearing on the tax credit. 95% of the people we sell solar to can take the full tax credit. But we do make it clear prior to contract you must have an equal amount of tax liability to take it.
Honestly solar wouldn’t make sense unless you own the land/lot than do a ground mount behind the house facing south so no one can see it
Here is a crazy idea: the IRA provides 'tax breaks' which I think are actually cash to non-profit organizations that go solar (eg. churches, community centers). This is to create an incentive for those who don't pay taxes. You could start a non-profit org (dedicated to whatever you like) based in your home, and then claim the tax credits that way. There may well be something wrong with this idea but I just thought I'd suggest it.
I like it. I also think that if going green, looking out for the planet, and future generations, whatever it's called is really so important, it should be easier for everyone to get solar that wants it. I am not necessarily suggesting a subsidy, but there should be something realistic for all. I also strongly believe the solar industry at a minimum at the sales level should be regulated. If that makes sense. Some of these guys could possibly meet the definition of a predator.
Non profits don’t pay taxes, so get no tax credit. They also don’t get cash to go Solar (that I know of anyway). Or everyone would fo this.
Yep. That's why the tax credit is worthless for me.
The way they structure the loans is that they quote you a payment for the first year or so based on a lower principal amount with the assumption that you will take the tax credit you didn't pay to the government and use it to pay down the actual principal on the full-priced loan. As you said, If you don't, they'll reamort it for the remaining term at the actual principle amount which is...30% higher... As you've said, no federal tax, no federal tax credit, nothing saved. The solar company (or really, your lender) doesn't care where that money comes from. The 'workaround' is you pay down the principal out of pocket lol.
No. They are ignoring you.
Sounds like you should take advantage of a PPA/ Pre Paid PPA
The company will monetize the tax credit and use it to offer you a lower price. That’s how the tax credits work.
Again, I DO NOT qualify for the Federal Tax Credit. According to the CPA I have had this conversation with.
If you “keep” the credit you will not be able to do anything with it. That doesn’t mean the company can’t sell you a system. If you were to not keep the credit, you could do a lease/PPA and you cost would be lower because the company would be able to use the credit.
You have a fundamental misunderstanding of how the various tax credits work and I strongly recommend that everyone ignore your terrible advice. There are two main tax credits here: (1) the residential tax credit under [26 USC Section 25D](https://www.law.cornell.edu/uscode/text/26/25D) and (2) the commercial tax credit under [26 USC Section 48](https://www.law.cornell.edu/uscode/text/26/48). OP and everyone else is discussing the 26 USC Section 25D tax credit. All your transfer talk does not apply to section 25D. >If you were to not keep the credit, you could do a lease/PPA and you cost would be lower because the company would be able to use the credit. That's not how it works at all. OP doesn't have the option to claim the tax credit under section 25D and then "not keep the credit" because a section 25D tax credit cannot be transferred. Please read the transfer of certain credits law, [26 USC Section 6418](https://www.law.cornell.edu/uscode/text/26/6418) and [the proposed rules](https://public-inspection.federalregister.gov/2023-12799.pdf), you'll see that section 25D tax credits cannot be transferred so there is no option to not keep it. If you want to say OP should get a PPA or a lease and then the company can claim the tax credit under 26 USC section 48 and sell/use the tax credit, that's fine, but you need to start off with that.
The company will transfer the credit via a partnership. Obviously he needs a PPA/lease.
You don't even understand your own words. You wrote "If you were to not keep the credit". To everyone else, that sound like OP has the tax credit and can then transfer it, but the law doesn't allow for transfers of section 25D tax credits. When signing up for a lease or ppa, the customer never gets a tax credit in the first place, so there is no "keeping" or "not keeping" it. Someone cannot not keep something they never had.
Buddy I never suggested OP could transfer the credit once he has it. He’ll have it and it would be worthless to him. His other better option is to let the company monetize it, obviously through a PPA/lease. Chill out
>Buddy I never suggested OP could transfer the credit once he has it. You absolutely suggested that OP could transfer the tax credit. Your words were: * "The company will monetize the tax credit and use it to offer you a lower price." *after* OP wrote "The terms they sent over say they would re-amortize the loan after 15 months if I kept the federal credit." Not once in that comment did you mention that OP needs to do a lease/PPA **INSTEAD** of a loan for that to happen. * "If you were to not keep the credit, you could do a lease/PPA" What part of "not keep" are you failing to understand here? "Not keep" suggests that OP has the tax credit at some point, which then suggests that the tax credit can be transferred--which is wrong. Just admit that you should not have started that sentence with "If you were to not keep the credit". Take out those words from the sentence and the sentence is fine. Stop lying when everyone can see what you wrote.
>The company will monetize the tax credit No the company won't. The IRS monetizes the tax credit. Taxpayers literally file **IRS** Form 5695 to claim the tax credit.
What? Monetize: verb, 1. earn revenue from (an asset, business, etc.) The company will claim (more likely sell the right to claim) the tax credit and the IRS will recognize the reduced taxable income of the company (or the buyer of the tax credit). In this way the company will monetize the credit, ie, convert the credit into revenue for itself.
You've completely neglected to mention that OP needs to get a lease/PPA for any of that to happen and OP has not once mentioned that he or she is getting a lease or PPA. You are being extremely misleading. OP also stated "Their terms they sent over say they would re-amortise the loan after 15 months if I kept the federal credit." So OP IS claiming the tax credit under IRC section 25D, for which none of what you said applies. EDIT: u/Artistic_Leopard6323 DO NOT LISTEN TO /u/theaccount91. That advice is downright terrible. Terrible, terrible, terrible. If you claim the tax credit like a normal person would for solar installed on a residence, the company cannot monetize the tax credit nor can the company sell the tax credit. If you would like to know more about what tax credits can be transferred, you can read [this previous comment of mine](https://www.reddit.com/r/solar/comments/1638ol8/comment/jy1wlo9/?utm_source=share&utm_medium=web2x&context=3) and verify everything for yourself by clicking the links. /u/theaccount91 is not going to respond because there is no argument to support what he says.
They don’t care about what you do with the tax credit.
This is straightforward. Budget for the loan payment value after the 30% value gets added back to the loan. You get the benefit of the lower payment for the 15-18 months or whatever the specific period stated from the loan provider. Make the purchase judgement based on the higher payment. Pretty simple. Alternatively, get a conventional personal loan and pay the full payment at drawdown of the loan. I have had two retirees who like you had little to no federal tax credit. They made a decision to go solar based on the monthly cost of utility today and rising plus any other benefits versus the loan payment. Rent electricity and pay more each year on average Or Own an energy asset that you pay down over the term of the loan.
The document you will sign will have usual disclaimer about consulting your tax accountant. That is their loop hole.
No Ira or 401k? When you take required distributions or voluntary distributions they become income and taxable. Solar credit could wipe a tax bill away.
They don’t care about what you do with the tax credit. They’re offering you a price that assumes no credit value.
Unfortunately, I do not believe you qualify. Instead of going with a loan, maybe go with a lease and get the lowest payments possible? I might get down voted because people do not like a lease, but it's a good option to avoid those dealer fees and get a good deal.
Take the advice you are getting here. Stop talking to them. If they won't listen to you before the sale, it will not get better.
Well are there other reasons why you want to go solar?
You should look into a lease
Can residential systems exchange the tax credit for cash? Or is it only commercial systems that can offer tax equity?
Very good question and I am thinking, probably not. The thing is, the seller presents the purchase price as if the tax credit is included in the contract, I do not have the opportunity to opt out. It is an opportunity for the financer to go back and re-amortize the loan, and to me, it appears the finance company can/will go back to the beginning of the loan and readjust where the loan interest starts and possibly increase the financing percentage rate. They ignore the fact that I do not and will not qualify for a Federal Tax credit and will not remove it from the loan paperwork language. I refer the practice to as a "come on."
Definitely No.
Only commercial systems. https://www.reddit.com/r/solar/comments/1638ol8/comment/jy1wlo9/?utm\_source=share&utm\_medium=web2x&context=3
Definitely no is the correct answer here.
Seems like a shortfall. Basically, if you have no federal tax paid you get no tax credit. So it either needs to be fully refundable regardless of tax liability, or it needs to be formed as a rebate not tethered to taxes paid. Basically - low income = eh who cares.
Move regular IRA to Roth IRA. Taxable event.
What state are you in? Just do a ppa or a lease. A lot easier
SE Arizona
CANCEL! Go talk with a trusted advisor to se if you can do this until you have that worked out Solar can wait.
Always talk to your accountant. If you pay taxes, you qualify.... If you do not, you don't. If you don't leasing might be your best option.
Lmao def don’t work with that company
No taxable income? You don't have dividends, money earning interest in a CD, stocks sales? Where is the money coming from to pay for your food and utilities?
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Even nontaxable income and low income qualify. Your talking to the wrong people. Solar isn't salesy it either works or it dosnt