SREC's

[BP.]

Are any of you considering SREC's (Solar Renewable Energy Credits) as taxable for clients who are selling energy back to the power company from their solar panel arrays? Have 3-4 doing this now. Seems like a "cloudy" issue. Sorry . . . couldn't resist.

[BP.]

bump . . . none of you have this situation? thx!

[JG EA]

I have not. But could it be viewed as a rebate on their power bill? That is how I view when people get a credit from the power company for a new appliance, etc. If perhaps it was more than their power bill then it would seem reasonable to be taxable.

[JJ EA]

Utilility Co 1099

What state are you in? The rules on how to treat SREC payments varies by state and the exact discription of the payments. There was a recent private letter ruling on a case in AZ that the up-front payment from the utility co. was not a rebate and was taxable income, and the total paid + the amount paid by the utility co. for the system was allowable for the 30% credit calculation. Now the utility co. is issuing 1099's for these payments. I know that is not the situation that you are asking about. I just wanted to get the information out that the big "rebates" given by the utility co. aren't always actually "rebates". The main point of the ruling was the the person was selling something based on the paperwork they signed with the utility co.

[BP.]

Thanks much for the info on rebates for the systems, and how to treat. Will watch for 1099's on those.

I'm in PA. I'm seeing sales of energy back to the power co starting to exceed power usage. No 1099's. My very limited reading so far on the subject isn't yielding solid info on tax treatment.