Solar Value

[Meandering]

Randolph,

Phoenix would be an optimal sunlight area, while Long Island is not.

Start with how many days those solar panels were covered in snow, and start subtracting efficiency/optimal days to generate.

On this chart, you would compare Phoenix to New York City.

http://www.bigfrogmountain.com/SunHoursPerDay.html

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[Meandering]

If this sf is valued by an income stream over time should the IRS be looking at this re income, income credits, bartering? Or not. Just wondering.

Excellent question.

An SREC is a solar renewable energy credit that represents the renewable attributes of solar generation bundled in minimum denominations. SRECs are sold separately from the electricity produced by solar renewable energy projects thereby representing a significant revenue source for solar projects.

It is a well developed concept of tax law that an item of gross income is taxable unless specifically excludable from income. Many bloggers have cited Internal Revenue Code (“IRC”) section 136, Energy Conservation Subsidies Provided by Public Utilities, as support for excluding SREC income from gross income. IRC section 136 addresses subsidies paid directly or indirectly from a utility to a customer for the purchase or installation of any conservation measure.

Although there is scant guidance from IRS relating to the taxation of SREC income, IRS did issue one Private Letter Ruling (“PLR”) discussing this issue. A PLR is a written statement issued by the IRS to a taxpayer in response to a written inquiry from that taxpayer relating to specific facts.IRS does not cite or rely on PLRs issued to one taxpayer as a precedent for disposition of other cases and, in general,a taxpayer may not rely on a letter ruling issued to another taxpayer although a PLR does provide some evidence of IRS’ position relating to that issue.

In PLR 201035003 IRS held that SREC income did not qualify as a utility subsidy under IRC section 136 so was includable in gross income. The facts in the PLR were straightforward: taxpayer purchased a solar electric system to generate electricity for his residence. Taxpayer agreed to transfer any future SRECs generated by the system for a one- time payment from utility. The taxpayer requested a ruling that the SREC income was taxable income in order to not reduce the tax basis of the system to calculate his residential income tax credit.

In the ruling, IRS compared SREC income to the type of payment addressed in IRC 136 stating that the SREC payment was not a rebate or a purchase price adjustment to the property nor was it a subsidy intended to facilitate the acquisition of property. Because it did not qualify as a subsidy as defined in IRC 136 the payment was includable in gross income. Because the SREC income was includable in gross income the payment would not reduce the basis of property eligible for credit.

Conclusion

Until IRS or Congress issues more definitive advice relating to the taxability of SREC income, we believe that the above mentioned PLR supports the position that both commercial and individual taxpayers should treat SREC income as taxable for federal income tax purposes.

Of course, a taxpayer should consult his tax advisor to determine tax treatment under his specific facts.
http://www.rodmancpa.com/are-solar-renewable-energy-credits-taxable/

Could happen at any time.


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[Mike Kennedy]

So your solar PV system can not be worth more than $15,000 on resale because the buyer will not enjoy the tax benefit that only you can have even though it costs $30,000.

Yup, but make that $15,000. less depreciation from date of installation to date of future sale.

 

[Mike Kennedy]

Nope,

$108 per month is not a 15 year loan at 3.49% interest.

Try again.

At 3.49% for 15 years the payment is $214 a month.

You're only saving $75-100 per month.

The math does not work.

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when they sell a system it "sounds realllly good" but the math usually doesn't which is why the preponderance of systems are leased not purchased.

 

[Mikeyvee17]

It has value to you. It may have some value to a potential purchaser at a future date but as of the date the appraiser valued your home, there were no comparable sales that had a solar PV system. Your lender told you that:


So, as far as your lender is concerned, the solar PV system did not contribute to the market value of your home.

Because the appraiser SAID there was no VALUE!!

What are you not understanding here - just because someone "feels" there is no value, doesn't mean the appraiser doesn't have to FOLLOW THE GUIDELINES.

The lender agreed with the appraiser because it is in their benefit to do so!

 

[Mikeyvee17]

Nope,

$108 per month is not a 15 year loan at 3.49% interest.

Try again.

At 3.49% for 15 years the payment is $214 a month.

You're only saving $75-100 per month.

The math does not work.

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Shall I send you the bill? $108 per month for 15 years.

Those are the terms from NYSERDA

 

[Mikeyvee17]

It is all still basic math.

If you saved $75-$100 per month on the electric, lets just be generous and say you also saved $75-$100 per month on the oil, for an average monthly savings of $150.

View attachment 27124

You did not save yourself anything.

as far as, my carbon footprint??
just your insistence that the math works tells me you could not live in the small carbon foot print I have.





How about you do some research yourself. In the upper right is a search box.
Type in Solar,
then click titles.
You can read all the threads concerning solar here, but I'll warn you first,
they contain many citations to scientific studies,
and because they are scientific studies,
the kool aid you drank, may sour in your mouth.

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Also, you act like the utility company will NEVER raise any rates.

Here on Long Island, since PSEG took over for LIPA, rates have increased over 18% in the first year!

You need to take into account an average rate increase.

Or does your spreadsheet not do that for you?

 

[Mikeyvee17]

Yup, but make that $15,000. less depreciation from date of installation to date of future sale.

OK - and I would agree with that!

Getting back the point of this entire post - The appraiser did not follow the guidelines and is WRONG. There is a value to my solar system, and I was treated unjustly and unfairly by a biased appraiser that had no knowledge of the guidelines.

 

[Terrel L. Shields]

Solar City is leasing and funding systems. Not same issue.

This is a simple calculation - take the AI course. Creating scenarios and calculating fanciful "proof" of losses suggests I probably don't want you for my next CPA.

That is called an assignment condition.

That would be an assignment condition that is in violation of USPAP unless explicitly valuing a partial estate.

AGAIN - SEND THE REPORT AND THE COMMENTS OF THE "CHIEF APPRAISER" TO THE STATE APPRAISAL BOARD.

And do so for the good of this profession and hopefully one side or the other gets some guidance. The absence of other comparables with solar is like saying a second home on the site is invisible because no sales in the past year in the neighborhood had two houses sell.

 

[Mikeyvee17]

Randolph,

Phoenix would be an optimal sunlight area, while Long Island is not.

Start with how many days those solar panels were covered in snow, and start subtracting efficiency/optimal days to generate.

On this chart, you would compare Phoenix to New York City.

http://www.bigfrogmountain.com/SunHoursPerDay.html

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Same rules need to apply to a porch or a swimming pool. Start deducting how many times I can't sit on my porch in the Winter, as well as how many days I cannot swim in my pool.

You can't have it both ways - but it's ok, continue to ignore me when I say this....