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By Miriam Raftery
September 8, 2015 (San Diego’s East County) - The Internal Revenue Service (IRS) has issued a determination finding that individuals who invested in a shared community solar project can qualify for a 30% federal renewable energy tax credit.
While the ruling legally applies only to the Boardman Hill Solar Farm in Vermont, it is expected to boost demand for community solar, helping to further grow the already exploding residential solar market.
The announcement comes in a joint press release issued by the nonprofit Clean Energy States Alliance and the law firm of Foley Hoag which arranged for submission of a private letter ruling request to the IRS to clarify the issue.
CESA’s executive director Warren Leon says the ruling implies that the IRS may receptive to other shared community solar project members who claim the residential income tax credit (RITC) offered to homeowners adopting solar “when a project mirrors the structure used in this case.”
Rhone Reasch, president and CEO of the Solar Energy Industries Association, says “This ruling helps pave the way for even more growth under the widely successful federal investment tax credit.”
While the ruling can’t be cited as precedent legally by other taxpayers, it does suggest the IRS could be receptive to similar claims.
Nicola Lemay, Foley Hoag partner, says the IRS letter “fills an important gap” with a written resource “which can be used by courts, IRS personnel, and practitioners in structuring community shared solar projects.”
The tax credit is set to sunset at the end of 2016, however, creating a short window for communities to cash in on the credit.
CESA will hold a free webinar on this issue on September 22. Details are in the CESA press release.
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