Solar Loan Interest - Non-Secured Loan - Deductible for 2019?

[OldMaysFan]

Just want to be sure.  I have a credit union loan that is exclusively for a solar system that was installed in 2019 atop my primary residence.  The loan is not secured by the home.  I paid almost $1,500 in interest tis past year.  Despite not being secured, there is talk here in California that since this loan is for the improvement of my primary residence, that the interest is in fact deductible.  Has something changed?  Can I now deduct the interest on my Federal and/or State (California) returns?

[DianeC958 · Accepted solution]

No, you can only deduct loan interest that is secured by your home on the Federal and California.

Solar Panels do count as an improvement to your home.

Link about Deducting Mortgage Interest

[hamlincrnp]

Are we sure this can't be used for the energy credits. 

[DMarkM1]

Unfortunately not.  Here are the applicable lines from the IRS instructions for form 5695.   

"You will enter the amounts you paid for qualified solar electric property. See Qualified solar electric property costs, earlier." 

"For purposes of both credits, costs are treated as being paid when the original installation of the item is completed,"   That would include the cost of materials, installation, and taxes found on the invoice.   

For clarification on the second question; it is not whether or not a loan is secured or not that determines its deductibility, it has to do with what the loan is secured by.  For example, home mortgage loan interest is deductible, but car loan interest is not. Here is link that discusses interest deductions.