Solar Installation Date

[RoyS976]

Client paid for a residential solar unit and it was installed before 12-31-19.  However, it was not "on line"  with the utility company  until January, 2020. Based on the limited research available, it appears the credit must be taken for 2020 at that the credit will be reduced accordingly.  Is this correct, or can it be taken in 2019

[itonewbie]

Where did you see that connect to the grid is required?  The expense should qualify so long as the original installation is completed pursuant to §25D:

(8) When expenditure made; amount of expenditure
(A) In general
Except as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed.

(B) Expenditures part of building construction
In the case of an expenditure in connection with the construction or reconstruction of a structure, such expenditure shall be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins.

[RoyS976]

I do thank you for your comment. That's the question.  It must be "placed in service".  Can that date occur before its actually hooked up to the utility company?    

[itonewbie]

But isn't the unit being used on the premises already?  Connecting it to the grid will just allow the taxpayer to receive a credit for excess capacity the taxpayer contributes back to the system - that's icing on the cake.

[RoyS976]

That's the issue and I think it becomes more of one as the credit declines.  I put solar on my home 4 years ago. Until the time it was put on the grid, they were just panels setting on my roof without the ability to generate power.  

[IRonMaN · Accepted solution]

The credit can't be taken in 2019 - at least that is the answer you are apparently looking for even though Obi-Wan is telling you otherwise.

[itonewbie]

The question is how the system is configured.  If it is designed to be grid-tied and cannot be used as a standalone system, the installation is not complete as of the end of 2019.  If it's set up to function independently with or without the grid, that would be a different story.

[IRonMaN]

What kind of panels are being used that you can't get power off of them for your own use?  I thought when folks put them up the purpose was to reduce their electric bill, not become the new power generator for their city.