Rollin from North Carolina contacted us just a while ago to ask:
If you install a solar panel system, receive the applicable tax credits and then sell the house in two years, do you have to refund the tax credits? If not, is there any penalty? … I have a 20 year shingle roof…should I consider re-roofing prior to installing solar panels and, as a NC Outer Banks resident (Ocracoke), what is the hurricane experience? Corrosion experience? Average sunlight here in Ocracoke?Thanks, Rollin
ANSWER: Rollin, the tax credit issue is complicated and you should definitely double check our advice here with your local tax geek. We’re solar geeks, so the IRS doesn’t really count us as tax authorities. Nevertheless, it is our understanding that you will not have to refund any of the portion of the tax credits that you’ve received thus far. Why do I say “thus far?” Because your 30% Federal Tax Credit vests over 5 years…. Therefore, you will only get 40% (2 years worth) of the full 30% Federal Tax credit. Again, please double check with your tax person, but that’s our understanding of the law from another solar financial guru, Andy Black. (Of course, Andy is a solar guru, not a tax guru.) Please see below from someone who knows better for commercial and residential tax consequences.
Now to the easier answers:
If your roof is older than 8-10 years, you should definitely re-roof before installing the panels. That way, you won’t have to go through the added headache of snapping the panels off later and having to deal with re-installing the racking system. Also, if you coordinate your roof replacement with your solar installer, both warranties will stay intact. If you take your panels off later, re-roof, then reinstall, you may be voiding the original installation warranty of either the roof or the solar installation.
Regarding winds, solar racking systems have gotten so good over the years that you don’t have to worry so much about them blowing off your house in a hurricane as much as you may have to worry about your entire roof being blown off. That said, after going solar, you should cover the panels with your homeowners insurance to prevent any ill feelings down the road. Corrosion can happen when installations are done by amateurs. The equation looks like: wet + electric current + salt water + exposed conduit = big problem. This is why it’s important to go with an experienced, licensed crew, who aren’t going to cut any corners. Most solid solar installation outfits will warranty all their work for at least 5 years, though some of the best out there will warranty their work for 10 or more. (Btw, solar panels nowadays are warrantied to be producing at at least 80% of their original capacity at year 25, so you know they’ll still be kicking out significantly more than that then because the solar panel manufacturers don’t want to be shelling out new panels all over the country.)
We’re not Ocracoke meteorologists, but we know North Carolina gets significantly more sunshine than say, Germany, which has more solar installed per capita than anywhere else in the world. What makes solar make financial sense isn’t the sunlight, insomuch as the combination of available state rebates, financing, and tax credits (which NC has in spades). Cheers,
Last modified: September 5, 2019