IRS ruling could promote solar projects
WILSON RING6:50 p.m. EDT September 1, 2015
MONTPELIER – A man who bought 10 solar panels as part of a jointly owned solar power project is poised to get 30 percent of his cost added to his income tax refund after the Internal Revenue Service ruled he could take the same tax credit used by some of the people who put solar panels on their roofs.
While the IRS ruling only applies to Roland Marx, the Mount Holly man who sought the credit for his $8,746 investment in the Boardman Hills Solar Farm in West Rutland, the people who helped him win the ruling hope it will give a boost to others who would like to do the same thing.
Marx bought 10 solar panels that are part of the 640-panel solar farm that started generating electricity late last year. The tax credit reduces his cost to just over $6,000.
“It makes a big difference, a very big difference,” said Marx, who asked for an extension of his 2014 taxes and is now ready to file. He got the ruling with the help of the Montpelier-based nonprofit, the Clean Energy States Alliance.
The Boardman Hills Solar Farm is one of a growing number of solar power projects that allows people who are unable to install solar panels on their property to get power generated by the farm and use it to offset their consumption of electricity, a process called net metering. More than 30 people own a different number of panels in the Boardman Hills project.
The Boardman Hills project is one of a number of so-called community-shared solar projects that are different from those in which people install panels on their roofs. People who put the panels on their roofs — depending on how the deal is structured — have been able to take advantage of a special one-time 30 percent tax credit.
“It has not been clear whether a person who owns panels in one of these community solar projects qualifies for the residential tax credit they would get if those panels were sitting up on their own roofs,” said Clean Energy Executive Director Warren Leon.
Leon’s organization worked with the Vermont Department of Public Service to get a ruling from the IRS. The IRS recently issued what’s called a “private letter ruling” that allowed Marx to take the credit. By law the letter cannot be cited as a precedent by other taxpayers, Leon said.
“But it’s the first indication of where the IRS stands,” he said. “It suggests that the IRS is likely to be receptive to claims for the residential tax credit if the project is similar to the one that got the favorable ruling.”
Christopher Recchia, the commissioner of the Vermont Public Service Department, said he was grateful Leon’s group helped get the IRS ruling.
“This is good news, not only for the Boardman Farm, but if indicative of the IRS’ direction generally, the letter ruling should help others who want to participate in group net metering projects take advantage of the residential tax credit, just as though the solar project were on their own property or on their roof,” Recchia said.
While officials say the ruling could give a boost to some community solar projects, it’s unclear how far it will go because the credit is scheduled to expire at the end of next year.
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