What is considered in-service for solar credit? My system was fully installed, paid, and permitted in '24 but no PTO from utility yet. We are producing for our own use.

Forum|Forum|1 year ago
February 1, 2025
1 reply
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The system is fully operational, and includes a Tesla powerwall backup. PTO has been delayed due to our utility company being backlogged at end of the year, and now wanting to inspect the net meter collar before we export to the grid. As mentioned above, we are operating for our own personal consumption without export to the grid.

Best answer by KeshaH

The IRS considers a solar system "placed in service" when it is ready and available for its intended use.

Your solar system qualifies as "in service" in 2024 and is eligible for the residential clean energy credit because the system:

- was fully installed in 2024

- was fully operational and generating power for your home use

- has passed local inspections and received necessary permits

- has been paid for in full

Be sure to keep all documentation showing:

- installation completion in 2024

- full payment

- permits

- system specs

KeshaHAnswer

The IRS considers a solar system "placed in service" when it is ready and available for its intended use.

Your solar system qualifies as "in service" in 2024 and is eligible for the residential clean energy credit because the system:

- was fully installed in 2024

- was fully operational and generating power for your home use

- has passed local inspections and received necessary permits

- has been paid for in full

Be sure to keep all documentation showing:

- installation completion in 2024

- full payment

- permits

- system specs

chantellem84Author

Thank you for your response! So I am 100% clear, we do not have "permission to operate/PTO" from the utility company yet, though it is expected next week.

i've read conflicting information about the requirement for PTO and a connection to the grid in order to claim the credit, so I just want to double check. Thanks again!

Vanessa A

If you do not have permission to operate, then it is not ready and available for use and it is not placed in service. Once you CAN actually use it, then you can claim it in that year as that is the year it is complete and ready for use. The key word is placed in service, if it is not able to be used due to inspections, then it is still NOT placed in service so you would not be able to claim the credit until 2025 tax filing.

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