I have an older home that needs some upgrades in order to support a solar installation (new roof, 200A electrical panel, and replacing old wiring). Are the costs of doing those upgrades included (in whole or in part) when calculating the value of the Investment Tax Credit for solar installations?

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I researched this same thing last year and found no satisfactory guidance from the IRS or examples of cases where this issue was challenged.

One of the companies I spoke with said that any upgrades conducted at the time of solar install would qualify for the tax credit, including new 'solar-ready' HVAC and seemingly unrelated items like additional insulation in my attic. They claimed that this was standard practice and that they haven't heard of a problem with doing so.

Two other companies said only the items essential to a solar installation would qualify for the tax credit.

The HVAC/insulation piece seems sketchy, but all companies I spoke to agreed that labor+equipment necessary to install the solar system qualified for the tax credit. Replacing the main electrical panel is often necessary. I'm not sure how an entire new roof could be deemed necessary, but if it were then I can see it being included as well.

Form 5695 Instructions only offer this:

You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, and fuel cell property. Include any labor costs properly allocable to the onsite preparation, assembly, or original installation of the residential energy efficient property and for piping or wiring to interconnect such property to the home. The credit amount for costs paid for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity of the property.
Qualified solar electric property 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.

The panel and wiring seem clearly covered by the "piping or wiring to interconnect such property to the home" part, replacing the roof seems less clear. Personally, I wouldn't hesitate to include all costs that were essential to the solar installation, but I did not want to work with the company that was suggesting additional insulation could be rolled into my solar installation bill.

Hopefully someone can offer more definitive guidance, every now and then I see an article that references IRS guidance on the topic but provides no links to IRS sources, so I don't trust those.

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