@Critter-3
You're right but in the wrong way.
Section 25D clearly says that a person qualifies for the credit if the use the home as a residence. It does not have to be their main residence and they do not have to own it.
Regarding basis, 25D says:
For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.
In other words, if a basis adjustment is allowed, it must be reduced. But as you point out, if a resident who is not an owner pays for the improvement, no basis adjustment is allowed. That's not a conflict--if there is no basis adjustment, there is nothing to reduce.
Example:
John owns the home, Mary is a resident. John paid $100,000 for the home. If John installs a $20,000 solar system and gets a 30% credit, John's adjusted basis in the home is $100,000+$20,000-$6,000=$114,000. However, if Mary pays for the system and gets a $6,000 credit, John's basis remains $100,000. John does not get a positive adjustment for the system, therefore there is nothing to subtract.
