In August 2015, the Internal Revenue Service issued a private letter ruling concluding that a particular owner of PV panels in an offsite, community-shared solar array is eligible to take advantage of one of the primary incentives offered to homeowners adopting solar—the 30 percent federal residential income tax credit available under Section 25D of the Internal Revenue Code, sometimes known in the industry as the “residential ITC.” The Clean Energy States Alliance (CESA), in collaboration with stakeholders in Massachusetts and Vermont, and with attorneys in the Boston office of law firm Foley Hoag, LLP, arranged for the submission of the private letter ruling request.
Community-shared solar allows electric customers to buy an interest in an offsite solar array and to receive credit on their electricity bills for their ownership interest. While the IRS’s ruling is only legally applicable to the individual taxpayer in question—a solar panel owner in Boardman Hill Solar Farm, a member-managed 150 kW off-site solar array in Vermont—the ruling may open up project opportunities for direct ownership of community-shared solar systems by multiple individuals.
- Private letter ruling issued to the petitioning solar panel owner in the Boardman Hill Solar Farm, accompanied by a cover letter by Foley Hoag and community-shared solar FAQs by CESA
- Press release issued by CESA and Foley Hoag
For further discussion of the details and legal implications of this private letter ruling, CESA hosted a free webinar on September 22, 2015 featuring Foley Hoag attorneys Adam Wade and Nicola Lemay. Slides and a recording of this webinar are available here.
- Shedding Some Light on a Taxing Situation for Community-Shared Solar, a blog post on this ruling by CESA Project Manager Nate Hausman, posted on September 1, 2015
- IRS Opens the Door to Expanded Use of Residential Section 25D Credit in Offsite Solar and Other Renewables Projects, a blog post by Foley Hoag attorney Adam Wade, posted on November 7, 2013
- Shared Solar: Current Landscape, Market Potential, and the Impact of Federal Securities Regulation, a report by the National Renewable Energy Laboratory (NREL), April 2015
Media Inquiries: Please contact CESA Project Manager Nate Hausman with media inquiries. Email firstname.lastname@example.org, or call (802) 223-2554 x206.
Photo Credit: The photo at the top of this page shows the Boardman Hill Solar Farm under construction in December 2014. This photo is reprinted with permission.