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Old 05-09-2022, 08:36 PM   #1
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Federal Tax Credit for Solar on Boat

I am getting ready to install two 385 watt solar panels on my Nordic Tug to minimize genset run time and will be investing around $2000 dollars by the time I add in a charge controller, mounting frame,cabling, fuses, etc. The other possible project will be changing out my 880 Ahr Lifeline AGM house bank which is now in its 12th season and is probably getting close to EOL although we had no real issues last season. If this goes ahead, I will likely upgrade to a LiFePO4 house bank keeping the the existing AGM start and thruster batteries charging them from the genset/alternator and DC to DC charger.

I am fully aware of the technical aspects of upgrading to LiFeP04.

My question which only applies to US members is:

Have any members taken the allowable percentage for a boat solar installation (including batteries) as a Federal Tax Credit on their income taxes? If so, has anyone run into any issues? Since the credit is 26% for 2022, this could help defray the cost of the system. My tax guy, a non boater, seemed to think this was OK.


Any responses would be welcome. Thanks
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Old 05-09-2022, 08:45 PM   #2
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Are you a full time live aboard? The credit is meant for your primary residence.
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Old 05-09-2022, 09:48 PM   #3
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I believe I am correct that the credit applies to both primary and secondary residences per www.energy.gov. A boat meeting certain criteria qualifies as a secondary residence.

Other opinions or feedback would be appreciated.
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Old 05-10-2022, 12:20 AM   #4
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We were recently informed by our CPA that as liveaboards we would qualify for the tax credit as the boat is our primary residence. Don't know about boats as secondary residences, though.
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Old 05-10-2022, 12:23 AM   #5
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Also I think you have to itemize to get the credit.
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Old 05-10-2022, 04:05 AM   #6
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Originally Posted by Senojev View Post
I believe I am correct that the credit applies to both primary and secondary residences per www.energy.gov. A boat meeting certain criteria qualifies as a secondary residence.

Other opinions or feedback would be appreciated.



Yes, I was wrong Secondary Residences do qualify. IRS Form 5695, Residential Energy Efficient Property Credit is very easy and straight forward.
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Old 05-10-2022, 07:47 AM   #7
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I did the credit on my previous boat and again on the current one. No issues, but there wouldn't be unless you got audited. Never had that happen.
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Old 05-10-2022, 07:56 AM   #8
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The federal credit applies to both primary and secondary residences. Most boats owned by people on here would qualify. I claimed it on my boat last year when we installed solar, no issues. And you don't have to itemize to claim the credit. I couldn't claim the NY credit, however, as that one is only for your primary residence.



Including batteries is questionable, however. The way the federal credit is written, batteries are only eligible if they're only charged by the solar system. If the system can charge them from other sources, they don't qualify.
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Old 05-10-2022, 11:52 AM   #9
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Solar panels, mount, change controllers, wiring can be claimed if you meet the criteria. But unless you have a very unusual boat, the batteries will NOT qualify. They only qualify if they are exclusively charged by solar, and thatís very unlikely in a typical boat. I think Inverters do qualify, but canít recall 100%. At least this is how we handled it for 2021.
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Old 05-10-2022, 12:00 PM   #10
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Solar panels, mount, change controllers, wiring can be claimed if you meet the criteria. But unless you have a very unusual boat, the batteries will NOT qualify. They only qualify if they are exclusively charged by solar, and thatís very unlikely in a typical boat. I think Inverters do qualify, but canít recall 100%. At least this is how we handled it for 2021.
Inverters do qualify, but your post agrees with my understanding on batteries.
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Old 05-10-2022, 12:02 PM   #11
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Inverters do qualify, but your post agrees with my understanding on batteries.


Thanks. I couldnít remember about the inverters. Of course most of the $$ is in the batteries and they donít qualify.
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Old 05-10-2022, 01:44 PM   #12
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I have done FOUR solar / battery systems and have always gotten credit for the batteries as well.

And then there is this---
"Battery systems that are charged by a renewable energy system more than 75% of the time are eligible for the ITC." Obviously the batteries are entirely or even primarily charged by the solar panels on your boat so yes you would definitely get the tax credit for the battery expense as well.
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Old 05-10-2022, 01:52 PM   #13
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I have done FOUR solar / battery systems and have always gotten credit for the batteries as well.

And then there is this---
"Battery systems that are charged by a renewable energy system more than 75% of the time are eligible for the ITC." Obviously the batteries are entirely or even primarily charged by the solar panels on your boat so yes you would definitely get the tax credit for the battery expense as well.


Where do you see that? I think that may have previously been the rule, but Iím pretty sure it isnít anymore.
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Old 05-10-2022, 01:52 PM   #14
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Originally Posted by Zoar View Post
I have done FOUR solar / battery systems and have always gotten credit for the batteries as well.

And then there is this---
"Battery systems that are charged by a renewable energy system more than 75% of the time are eligible for the ITC." Obviously the batteries are entirely or even primarily charged by the solar panels on your boat so yes you would definitely get the tax credit for the battery expense as well.
I remember seeing that 75% wording related to a commercial solar tax credit. But the residential solar tax credit states "Energy storage devices that are charged exclusively by the associated solar PV panels". So if the system is equipped to charge the batteries from any other source, the batteries don't count.
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Old 05-10-2022, 02:02 PM   #15
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Could one include the batteries in the build as part of a "solar generator," solely charged by the panels, that at a later date be reconfigured? Nothing states that what is installed cannot be upgraded or changed.
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Old 05-10-2022, 02:10 PM   #16
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Quote:
Originally Posted by rslifkin View Post
I remember seeing that 75% wording related to a commercial solar tax credit. But the residential solar tax credit states "Energy storage devices that are charged exclusively by the associated solar PV panels". So if the system is equipped to charge the batteries from any other source, the batteries don't count.
It is not just commercial. As I stated I have done four solar systems with batteries, 2 residential, one for my food truck that ALSO powers an off grid home, and for my boat. My accountant who has a focus and expertise on handling taxes for people with solar systems has always gotten my credit on my NON-commericial installation's batteries.
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Old 05-10-2022, 02:14 PM   #17
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Originally Posted by Zoar View Post
It is not just commercial. As I stated I have done four solar systems with batteries, 2 residential, one for my food truck that ALSO powers an off grid home, and for my boat. My accountant who has a focus and expertise on handling taxes for people with solar systems has always gotten my credit on my NON-commericial installation's batteries.
Interesting. I took the wording from here: https://www.energy.gov/eere/solar/ho...-photovoltaics
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Old 05-16-2022, 12:42 PM   #18
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If there is any kind of gray area or intepretaion in the wording, I would take the credit. There is nothing preventing you from taking the credit and as others said, unless you get audited, the credit is yours to keep.
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Old 05-16-2022, 12:43 PM   #19
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One way of looking at is the fact that you're going to spend the money anyway on the solar system, including the batteries, so you might as well take the tax credit for the whole shebang. The odds are very good that it will sail right through with no problems. But, on the off chance it is questioned by the IRS and ultimately disallowed, at worst you'll have to pay a penalty and interest on the amount that was disallowed. Yes, there is some risk, but in this case, the reward far outweighs that risk unless you've been audited several times in the past and/or have a boat load of other questionable exemptions that would set off a red flag in the IRS computer. I'd certainly go for it if it were me.
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Old 05-16-2022, 12:46 PM   #20
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I agree with Mojo. He said it better than I was trying to in my previous post.
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