How to Deduct
the Sun Titan Trailer

Take Advantage of New Inflation Reduction Act Tax Credit

Option B is for business owners, regular consumers and homeowners. In late 2022, the Inflation Reduction Act extended benefits from the Business Energy Investment Tax Credit, as well as added some new tax credits. Tax benefits are extended through 2032, meaning any Sun Titan Solar Trailer project could enjoy a 30% tax benefit on installed solar and battery storage equipment. The Inflation Reduction Act laid out that any solar system, whether connected to the grid or operating off-grid, is applicable to receive a 30% credit on taxes for the purchase price of the components, as long as that system is providing power for a “dwelling unit”. Sun Titan Trailers interprets this as, if there’s a solar trailer system providing power for a home in any way, its providing power for the dwelling unit. As always, consult your personal tax professional, but we think it’s a pretty clear case of eligibility. There is no maximum credit, write off as much as you want! The tricky part here is that only some components are eligible, including…

• Solar PV panels, inverters, racking, balance-of-system equipment, and sales and use taxes on the equipment;
• CSP equipment necessary to generate electricity, heat or cool a structure, or to provide solar process heat;
• Installation costs and certain prorated indirect costs;
• Step-up transformers, circuit breakers, and surge arrestors;
• Energy storage devices that have a capacity rating of 5 kilowatt hours or greater (even if not charged with solar)
• For projects 5 MW or less, the tax basis can include the interconnection property costs spent by the project owner to enable distribution and transmission of the electricity produced or stored by the system—this can include costs that are incurred beyond the point at which the energy property interconnects to the distribution or transmission systems

Luckily, the Sun Titan Solar Trailer is an all-in-one unit, so the entirety of the system should be covered. Our minimum system build is 10kWh of battery storage, meeting the aforementioned requirements.

While Section 179 write offs apply to solar pump or solar power installations anywhere on the ranch or farm, the Inflation Reduction Act language requires the system to provide power to a “dwelling unit”. Any “dwelling unit” qualifies for the tax credit, including mobile homes, boats, homes, off-grid cabin or RVs. Your RV or off grid cabin must be accepted by the IRS as a second home for tax purposes to be valid for the credit.

Let’s look at the official language for what type of systems exactly qualify…

1. Standalone (off-grid) PV systems installed after 12/31/2022 with at least 3kWh of storage capacity will be covered by the Solar ITC at 30%.
2. Hybrid (grid-tied but also connected to battery storage) PV systems installed after 12/31/2022 are covered by the Solar ITC at 30% so long as these additional criteria are met:
   • The PV and batteries were installed at the same time
   • The storage capacity of the battery bank is at least 3kWh
3. For grid-tied systems installed before 12/31/2021 that had battery storage added to them during 2022, the battery storage components likely qualify for the 30% rate.
4. Standalone and Integrated Battery Storage. Any battery bank used for a “dwelling unit” is eligible for a tax credit, even if that batteries aren’t connected or charge by solar panels. Before the Inflation Reduction Act was passed, batteries had to be connected to a solar panel system in order to qualify for the federal solar tax credit. (You can claim the tax credit for batteries even if you buy and install them a year or more after you install the solar system.)

Eligible battery storage still must must store at least 3 kWh! Straight from the Inflation Reduction Act language…

“(2) DEFINITION OF QUALIFIED BATTERY STORAGE TECHNOLOGY EXPENDITURE.—Paragraph (6) of section 25D(d) is amended to read as follows: ‘‘(6) QUALIFIED BATTERY STORAGE TECHNOLOGY EXPENDITURE.—The term ‘qualified battery storage technology expenditure’ means an expenditure for battery storage technology which— ‘‘(A) is installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer, and ‘‘(B) has a capacity of not less than 3 kilowatt hours.”