How do I get federal tax credit for a solar-exhaust fan on a newly reshingled roof?

[DoninGA · Accepted solution]

Sorry, there is no federal tax credit for solar exhaust fans.

See the IRS Form 5695, Residential Energy Credits instructions - https://www.irs.gov/pub/irs-pdf/i5695.pdf

[letitiapepper]

IRS Directions for form 5695 says:

"Qualified solar electric property costs. Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. . . .  The home doesn't have to be your main home."  (Good to know -- put one in your second home, too!

    So, a solar-powered attic exhaust van is run on electricity generated by solar panels. right?  A solar exhaust van is (a) property that (b) uses solar energy to (c) generate electricity for (d) use in your home, specifically, for use by the attic van that cools your attic and reduces the heat in the house below, too. 

    So a solar powered attic van should qualify for the tax credit.

.

[TomD8]

@letitiapepper  - A solar exhaust fan does not qualify for the solar energy credit because it does not generate electricity.

[letitiapepper]

     Look at the IRS instructions: "Qualified solar electric property costs. "Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. . . .  The home doesn't have to be your main home."  

      hat is the "solar electric property"  that you want to qualify for the tax credits?  It  is a solar-powered attic fan. 

    Is a solar-powered attic  fan  "property that uses solar energy to generate electricity for use in your home "? 

     Yes, that is why you are buying it. 

     Instead of having to plug an electric fan into an outlet to use electricity that your public utility is selling to you, you are powering the fan with electric generated by the solar panels that cone with a solar powered attic fan,

    This is why a solar powered-attic fan meets the IRS definition  of "property that uses solar energy to generate electricity in your home."  The attic is sttill "in your home."

    You have to follow the IRS definition step by step.

[TomD8]

You're correct - if the solar fan has its own solar panels and generates its own electricity, it should qualify for the tax credit.

[BMcCalpin]

In 2013, the IRS published a notice that addressed this issue. In short, the solar panel portion of a solar powered exhaust or ventilation fan is considered eligible for the credit, not the cost of the entire fan.

This mean that the taxpayer needs to in consultation with the contractor and/or manufacturer to make a reasonable allocation of what part of the cost of the fan (and labor to install) can be allocated only to the solar panels themselves, and not to any of the rest of the fan/exhaust/ventilation system.

In the case of the prefab solar exhaust fan that sits on the roof as a single unit, it is probably not possible to break out the cost of labor allocable to the solar panels as compared to the rest of the installation, so in my opinion, only that part of the prefab solar exhaust fan that the manufacturer allocates to the solar panel part itself would qualify for the credit.

IRS Notice 2013-70

Q-29: Is an expenditure for a solar powered exhaust fan eligible for the § 25D credit?

A-29: Only the component part of a property that actually generates electricity for the dwelling unit is eligible for the § 25D credit. If a solar panel on a fan generates electricity to power the fan for use in the dwelling unit, the cost of the panel component may be eligible for the § 25D credit if all the requirements of § 25D are met; however, the entire cost of the fan is not eligible. Additionally, § 25D(e)(1) specifically allows certain labor costs to be taken into account when calculating the credit. Under this provision, a taxpayer may take into account only the labor costs allocable to the qualifying component when calculating the credit.

See https://www.irs.gov/pub/irs-drop/n-13-70.pdf