Can I get the home energy credit for solar batteries for my second home?

[mtntls1]

I purchased solar batteries for our second home. We do not rent out this home and it is only for our use.

[MonikaK1]

Yes. Solar photovoltaic systems do not necessarily have to be installed on your primary residence for you to claim the tax credit.

You might be eligible for this tax credit if you meet the following criteria:

• Your solar PV system was installed between January 1, 2017, and December 31, 2034.
• The solar PV system is located at a residence of yours in the United States.
• Either:
  • You own the solar PV system (i.e., you purchased it with cash or through financing but you are neither leasing the system nor nor paying a solar company to purchase the electricity generated by the system).
  • Or, you purchased an interest in an off-site community solar project, if the electricity generated is credited against, and does not exceed, your home’s electricity consumption. Notes: the IRS issued a statement (see link above) allowing a particular taxpayer to claim a tax credit for purchasing an interest in an off-site community solar project. However, this document, known as a private letter ruling or PLR, may not be relied on as precedent by other taxpayers. Also, you would not qualify if you only purchase the electricity from a community solar project.
• The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment.

Battery storage technology must have a capacity of at least 3 kilowatt hours.

See this Department of Energy webpage for more information.

Whether you get a refund, and the size of the refund, depends on the amount by which the payments you made, either through withholding, such as from wages or through estimated payments, exceed your tax liability for the year after other credits are applied.

The residential solar energy credit is worth 30% of the installed system costs through 2032.

If in 2023 you end up with a bigger credit than you have income tax due — a $3,000 credit on a $2,500 tax bill, for instance—you can't use the credit to get money back from the IRS. Instead, you can carry the unused portion of the credit over to the following tax year. 

 See this TurboTax tips article for more information.

See also the IRS Instructions for Form 5695 and this TurboTax help article for more information and instructions.

[mtntls1]

Thank you for the information. My solar power system for my 2nd home was already in place. I purchased solar batteries to replace worn out existing batteries. I'm guessing this might exclude me from claiming the tax credit?

Thanks again

[DawnC · Accepted solution]

You can take the credit in the year the battery is installed and is in-use.  If you made energy saving improvements to more than one home that you used as a residence during 2023, enter the total of those costs on the applicable line(s) of one Form 5695.  For qualified fuel cell property, the home must be your main home.   Qualified battery storage technology can be claimed on 2 residences if the battery storage has a capacity of at least 3 kilowatt-hours.    

The battery is part of the Residential Clean Energy credit and would qualify for the 30% when installed.   

FAQs on Residential Credits

Energy Tax Credits - Expenses you can claim as part of the Residential Clean Energy Credit (RCE), sometimes referenced as Solar Tax Credit.

• Solar PV panels or PV cells used to power an attic fan (but not the fan itself)
• Contractor labor costs for onsite preparation, assembly, or original installation, including permitting fees, inspection costs, and developer fees
• Balance-of-system equipment, including wiring, inverters, and mounting equipment
• Energy storage devices that are charged exclusively by the associated solar PV panels, even if the storage is placed in service in a subsequent tax year to when the solar energy system is installed (however, the energy storage devices are still subject to the installation date requirements)
• Sales taxes on eligible expenses

Both the Energy Efficient Home Improvement Credit (does not carry over) and the Residential Clean Energy Property Credit (does carry over) are nonrefundable personal tax credits. A taxpayer claiming a nonrefundable credit can only use it to decrease or eliminate tax liability. A taxpayer will not receive a tax refund for any amount that exceeds the taxpayer’s tax liability for the year.

[AmeliesUncle]

---

@Marylisaa wrote:

as long as the battery storage is charged by solar energy.

 Keep in mind that the credit applies only if the solar system powers the battery, not if it's charged from the grid.

---

As far as I know, the revised tax credit no longer requires it to be part of solar system.  Do you have any citations that say otherwise?

[Opus 17]

---

@AmeliesUncle wrote:

---

@Marylisaa wrote:

as long as the battery storage is charged by solar energy.

 Keep in mind that the credit applies only if the solar system powers the battery, not if it's charged from the grid.

---

As far as I know, the revised tax credit no longer requires it to be part of solar system.  Do you have any citations that say otherwise?

---

You are correct.  Under the current credit as of 2024, battery systems are allowable (must be 3kWh or greater) even if not collected to a solar system.  This enables users who are subject to demand pricing to charge up when rates are low and use the battery instead of the grid when rates are high.

However, the previous comment also contained link spam for a company, so that is being removed.