topic Solar panel purchase in CA after a few years of lease in Get your taxes done using TurboTax

Solar panel purchase in CA after a few years of lease

dhawal_kumar — Wed, 26 Jan 2022 18:33:43 GMT

My home in CA came with Solar panels. I am the first owner of the home but decided to lease the Solar Panel instead of purchasing it when I bought the home in 2013. In 2021, I purchased the Solar Panel and terminated the lease. Is there any credit I can get for this purchase?

Re: Solar panel purchase in CA after a few years of lease

AnnetteB6 — Wed, 26 Jan 2022 18:55:08 GMT

No, there is no credit available to you since the solar panels were installed in a prior year.

According to the IRS Instructions for Form 5695 Residential Energy Credits, "costs are treated as being paid when the original installation of the item is first completed". In your case, the cost of installation of the solar panels occurred prior to 2021. The 2021 energy credit is based on the costs of installation that occur in the tax year 2021.

For reference, here is a link to the IRS instructions: Instructions Form 5695

Re: Solar panel purchase in CA after a few years of lease

dhawal_kumar — Wed, 26 Jan 2022 19:07:31 GMT

Thanks AnnetteB6. And to confirm, there is no CA state level credit either -- right?

Re: Solar panel purchase in CA after a few years of lease

AnnetteB6 — Wed, 26 Jan 2022 19:35:42 GMT

No, there is not a separate CA state credit available.

@dhawal_kumar