How Condominium Association and Cooperatives can use the Solar ITC

The 30% Investment Tax Credit (ITC) transformed solar projects in DC, reducing costs and speeding up the shift to renewable energy. Additionally, this tax credit has shortened payback periods for condos owning solar systems and increased the prevalence and ability of DMV providers to offer power purchase agreements and roof leases in the city. This credit is available until 2032; starting in 2033 the credit will drop to 26% of the total system cost.

Passing Through The ITC for Tenant-Stockholders

For tenant-stockholders in cooperative housing corporations and condominium owners, this tax credit offers a unique advantage. Although associations cannot typically claim the credit as a single entity,it can be divided among individual unit owners based on their ownership share. According to IRS Notice 2013-70, you can claim your proportionate share of the expenditures made by your cooperative or association for solar installations. Tenant-stockholders’ cumulative tax breaks can sum to a maximum of 30% of the total system cost. The ITC is awarded at the end of the first year of owning the system, but will roll over to the following year if the recipient does not have enough of an appetite at the end of the year the system was installed.

ITC Coverage of Equipment and Labor Costs

The ITC covers solar equipment, labor costs, and any structural improvements needed to support the solar array. Work with a professional solar consultant to determine the specific scope of work that the ITC could apply to.

General Disclaimer

Given the ever changing tax code, please consult with your CPA on how your particular building can absorb the ITC if you are considering developing a solar array.

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