Question

Home office with solar panels electricity expense

Forum|Forum|7 years ago
June 5, 2019
1 reply
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I used to expense 15% of my home electricity bill as I used a room in my home as an office, however we installed solar panels a couple years ago and our electricity bill is now minimal.

How do I reflect in my business expenses the fact that I continue to use electricity that is no longer provided by the local utility company, but by my solar panels?

Is it fair to continue to expense approximately the same amount as in prior years?

J

JohnW15

Employee

No, you wouldn't want to expense the same amount (for electricity) as in prior years.

You suggest that, although solar panels cause your electricity bill to be minimal, there is still an electricity bill. Just use the appropriate percentage of that bill -- 15%, if that still holds.

Y

yolianAuthor

Thanks for the prompt answer, John. There's a logic in the approach you suggest, however it doesn't account for the fact that there's a significant upfront investment on my part and in doing so I've become my own electricity provider. It would appear fair that, as far as my business is concerned, it pays a going market rate, rather than a mere ~5% of what it'd have to pay to the utility company.

Or is that not how the IRS would see it?