Tax Relief for Solar Investment Losses?

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TickTock

Well-known member
Joined
Jun 5, 2011
Messages
1,701
Location
Queen Creek, Arizona
Long story short, the supplier of my solar panels (OPEN Energy/Applied Solar) has gone bankrupt. Meanwhile the famous Arizona heat has damaged my 11KW array beyond repair. It is a systemic problem - all 320 individual panels have opens below the glass resulting in low or no output. I took one apart to verify and that was a lot of work since they are glued together with lots of Silicon. These are the roof tile style which I paid a premium for. I wouldn't have even managed it without pricey solvent (Dynasolve 220). No way I'm going to do that for all 320 panels (labor cost would be higher than the array). I've spent over $20K out of my pocket for the array and have only gotten $11500 back in electricity since the installation in 2009. I need to replace the entire array (inverter, at least, is OK). So... since I cannot go after the company that sold it to me, is there a way I can at least write off the losses in my income taxes? How does that math work? I valued the array at over the $20K I spent since I expected it to live well beyond my break even point so assuming I can, what would I claim to be my losses?
 
That's a huge bummer :( It would be nice if the warranties which are backed by insurance policies were more clear and exactly what the policy would cover. I have no idea if any of my equipment is backed by insurance policies.

The cost of the system wild get added to the basis of your home so when you go to sell it you will not have to pay income tax on that gain but their is a large exemption in place that probably covers the gain.

Also thought of this but not likely applicable.

https://www.irs.gov/taxtopics/tc515.html
"A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected or unusual event such as a flood, hurricane, tornado, fire, earthquake or volcanic eruption. A casualty does not include normal wear and tear or progressive deterioration."
 
TickTock said:
is there a way I can at least write off the losses in my income taxes
Well, you maybe could go to Vegas and win a lot of money and reduce your income taxes on those winnings by claiming the panels were a gambling loss. I mean clearly the "investment" was basically a crap shoot :lol: But if you go that route, don't count on us visiting you in jail...
 
Ouch, that hurts. I went with LG just because there is a good chance they will be around should I need to file a warranty claim 10 years down the road. Can't provide any input on the original question. You may want to ask it on a solar-specific forum, such as solarpaneltalk.
 
Ouch, that really sucks.

Out of curiosity, what is the specific brand / model of panels you have?
 
If this is OE-34 it could have been worse: http://www.cpsc.gov/en/Recalls/2014/Centex-Homes-Recalls-Solar-Panels/

More here: http://www.hometownroofingcontractors.com/blog/are-rooftop-solar-tiles-a-fire-hazard
 
Valdemar said:
If this is OE-34 it could have been worse: http://www.cpsc.gov/en/Recalls/2014/Centex-Homes-Recalls-Solar-Panels/

More here: http://www.hometownroofingcontractors.com/blog/are-rooftop-solar-tiles-a-fire-hazard
Yup. That's the one. For a while, before the bankruptcy they were paying me monthly to keep it turned off until they finished the investigation. Eventually that stopped. I turned it back on but added another $1500 cost to install a thermal monitoring system to alert me if any hot spots developed. None did, but now at least I have a really cool security camera. Of course now it has turned itself off because the power output is too low for the inverter to even turn on. Breakers are open now.
 
I entered a Class Action lawsuit to get the system replaced. Although the original companies are bankrupt, they had purchased insurance to cover warranty claims and that insurance company is still solvent and needs to honor the terms of the insurance. Lawyers seem to think it is a slam dunk so I am hoping this will get resolved soon.
 
TickTock said:
I entered a Class Action lawsuit to get the system replaced. Although the original companies are bankrupt, they had purchased insurance to cover warranty claims and that insurance company is still solvent and needs to honor the terms of the insurance. Lawyers seem to think it is a slam dunk so I am hoping this will get resolved soon.

Awesome news! I really wish it was easier/more transparent/etc. for consumers to know if/what kind/details/etc. about insurance policies like this. When we are talking about 10/20/25 year warranties there is a great deal of uncertainty and consumers would sure benefit from knowing that a policy that like that existed.
 
Sorry for bumping ancient history but wanted to add closure here. The class action lawsuit finally came through and I am back online with a new solar array. Hurray! I guess I'll need to update my profile pic again.
 
TickTock said:
Sorry for bumping ancient history but wanted to add closure here. The class action lawsuit finally came through and I am back online with a new solar array. Hurray! I guess I'll need to update my profile pic again.
Congratulations!

Please tell us about your new PV array. (Hopefully it has fewer than 320 modules!)
 
It is not a Tesla roof. 42 Solarworld monocrystal SW 260's. They decided to replace the inverter with micro-inverters, too. Now I have a spare $3000 Fronius ig plus 10.0-1 inverter to find a home for. It's designed to work with 300-400VDC. Nissan Leaf battery is 360-400V. Hmmmm... :ugeek:
 
TickTock said:
It is not a Tesla roof. 42 Solarworld monocrystal SW 260's. They decided to replace the inverter with micro-inverters, too. Now I have a spare $3000 Fronius ig plus 10.0-1 inverter to find a home for. It's designed to work with 300-400VDC. Nissan Leaf battery is 360-400V. Hmmmm... :ugeek:
That sounds quite similar to my system. If they are Enphase microinverters, please go to the Enphase MTBF thread and let me know the details and I will add your 42 microinverters to those I am tracking for failures.
 
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