Deductions & credits

The actual tax code in question (26 USC §25(D) has this definition:

 

1)Qualified solar water heating property expenditure

The term “qualified solar water heating property expenditure” means an expenditure for property to heat water for use in a dwelling unit located in the United States and used as a residence by the taxpayer if at least half of the energy used by such property for such purpose is derived from the sun.

 

I don't know if, when Congress wrote the law, or the Treasury Department wrote the regulations, they were thinking about having to replace the tank before the solar panels, even though this is an expected occurrence (solar panel life of 15-20 years and tank life of 6-12 years depending on water quality).

 

Just on the basis of "property used to heat water" it would seem to include replacing the tank without replacing the solar panels.

 

I don't know what you mean by "verification."  You don't send proof when you file your return, you just claim the credit.  If audited, you must prove you had a qualifying expense, so save your documents (contracts, pictures, etc) for at least 6 years.