Private Letter Ruling on the Eligibility of an Individual Panel Owner in an Offsite, Net-Metered Community-Shared Solar Project to Claim the Section 25D Tax Credit

September 1, 2015

by Clean Energy States Alliance

The Internal Revenue Service has issued a Private Letter Ruling concluding that a particular owner of PV panels in an offsite, community-shared solar array is eligible for the residential tax credit under section 25D of the U.S. tax code. 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.

The pdf at the link to the right contains three documents:

  1. A cover letter discussing the legal significance of the private letter ruling from Foley Hoag, the law firm which provided the legal work to obtain the IRS ruling
  2. The private letter ruling issued to the petitioning solar panel owner in the Boardman Hill Solar Farm
  3. A Clean Energy States Alliance (CESA) Frequently Asked Questions leaflet on community-shared solar

The Private Letter Ruling is also available on the IRS website at http://www.irs.gov/pub/irs-wd/201536017.pdf.

More information and resources related to this ruling are available at http://www.cesa.org/about-us/member-news/newsitem/IRS-Community-Shared-Solar-PLR.