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02 December 2019
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Tesla Forum Question

Shortly Before Posting This Blogitem...

I will have posted the message below on the Tesla Forum web site. Two yesterdays ago I wrote a blogitem about how Tesla could extend and augment the United States federal tax credit for EVs, at least for buyers who have or install solar power systems. Instead of little or no tax credit, they might, in effect, save $14,000 on the purchase of a Tesla vehicle. I have suggested this to Tesla, directly, with no response, and am curious about how current Tesla owners will respond to my suggestion. Will they point out fatal flaws? Excoriate Tesla for their seeming indifference? Since it's an internet forum, will they invoke Hitler? I promise that, as of this moment, I have no idea. If there are interesting responses, I'll add them under my message.

Potential Remedy for Expiring Tax Credit

The tax credit for Tesla vehicles is down to $1875 and will expire in a month. Meanwhile, many competitors will be coming on the market with a full $7500 tax credit, putting Tesla at a great disadvantage. I've long wondered why Tesla doesn't leverage their solar power equipment sales and the associated 30% tax credit to help vehicle sales. Tesla Powerwalls qualify for the 30% credit, and what is a Model S, X, or 3 but several Powerwalls disguised as transportation? If Tesla offered a relatively inexpensive inverter and gateway from the car to one's home electric system, wouldn't at least the battery portion of the car qualify for a 30% credit?

Advantages for the buyer include home power backup, cheaper electricity from solar power, solar charging of the car, and a potential $14k tax credit. Advantages for Tesla include greater solar sales, profit on the inverter/gateway, and, of course, more vehicle sales and a competitive advantage. There are arguable "gotchas" with respect to this suggestion, but I don't think they come even close to negating the benefits. For more details on this idea, please see http://PriUPS.com/RIKLblog/nov19/191128-tesla-tax-troubles.htm

I'm really curious as to why Tesla hasn't offered this long ago.

Richard

UPDATES, If Any, Follow:

04 December 2019

In the few days since I posted this, there have been some valuable comments.

  • From TeslaTap.Com: I'm not an accountant, but I'm about 90% sure the battery has to be physically installed in the house at the same time as the solar is added to get the credit. I doubt the car would qualify unless permanently installed in some strange way.
  • From andy.connor.e: Powerwall installation alone does not qualify for the tax credit, but if you install solar and powerwall together, the powerwall is included in the tax rebate. Solar by default qualifies for the tax incentive. He also added a link to the official Internal Revenue Service Form 5695 that "explains" the Residential Energy Credit.
  • From jrweiss98020: Batteries only qualify for the credit if they are charged exclusively by the solar panels.

The three-page IRS form has only has one paragraph about "Qualified solar electric property costs" and a single sentence about when you can realize the "costs."

Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. The home doesn't have to be your main home.

and

...For purposes of the credit, costs are treated as being paid when the original installation of the item is completed.

[Emphasis supplied.]

I am not a lawyer or accountant (insert comment of your choice here) and perhaps decades of counting angels on pinheads gives those professionals insight into the meaning of really short words. To me, use and item are ambivalent. Item would seem to refer to the solar system or any part thereof. For example, if you add Powerwalls to a solar system, they qualify for the credit even if they're installed in a different year from the solar panels. Likewise, use to me implies that a car, clearly property, if charged from solar power and then discharged back to the house, whether routinely (for peak cost saving) or episodically (for backup) would make it indistinguishable from Powerwalls in terms of function. (Apologies for the length of that sentence. I will have it taken out and shot if this issue is resolved.) I don't see anything in the IRS document that mandates that the car can't, from time to time, be disconnected and driven.

I don't claim that mine is the definitive interpretation. Reading the IRS form restrictively, one might interpret it to mean that only the original installation deserves the credit and later additions don't. Reading it liberally—look at the part about structural components—and you could argue that the whole car, not just the batteries, deserve the tax credit.

Finally, although the tax credit would be an enormous boon for both Tesla and their customers, it's not the only boon! Using the car for utility backup and/or cost reduction are worthwhile in themselves.

Further Updates, If Any, Follow:

07 December 2019, perhaps the last word

andy.connor.e 

Also found these links.
https://www.energysage.com/solar/solar-energy-storage/energy-storage-tax...
https://www.nrel.gov/docs/fy18osti/70384.pdf

To which I replied:

Thanks. The energy-storage-tax link is especially interesting. Although, they do say: "...we are solar experts, not tax experts! Tax codes are complicated, so consult your tax advisor before deciding what is best for you."

Everything I've been suggesting requires solar power, not grid charging. The ambiguous part is whether a vehicle can be treated similarly to a Powerwall for tax purposes. 

Also, as I asked above: "If your solar system delivers an average of, say 50kWh per day, and your car, on average, uses less than that, you could argue that your car receives all its charge from solar. Yes, perhaps it's somewhat roundabout, but even so..." 

It would be good to have an answer to that, too, since a "Yes" would imply that anyone with enough solar power could buy a Tesla and get the tax credit. Otherwise, presumably, the car would have to be charged directly from the solar panels, a technically meaningless distinction but one perhaps fraught with tax consequences.

Nice can'o'worms, no?
Richard

andy.connor.e 

"Everything I've been suggesting requires solar power, not grid charging. The ambiguous part is whether a vehicle can be treated similarly to a Powerwall for tax purposes."

I doubt it. The powerwall does not get disconnected from your system.

In Other Words

This suggestion and thread "ended" inconclusively. Absent any further interesting posts, I'll let andy.connor.e have the last word, above. He has his doubts, as do I. But a "Yes" or "No" would be far more useful. So far as I know, no tax experts have weighed in, and Tesla hasn't commented. I'm going to try to do some off-forum research and if anything more conclusive than "I doubt it" becomes available, I'll let you know. On to something non-Tesla "tomorrow."


 
2019
Richard Factor

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"Arzachel"

Steve Hillage

 

 

ToTD

Many of the T-shirts I depict here are of uncertain provenance but at least are decipherable as to subject or meaning. This one is "none of the above." No idea where I got it or what it depicts.

It's definitely made of "cloth," though.


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