Solar energy credit

[Greta]

Client installed system at end of 2022, but monthly payments don't begin till Jan 2023. Zero downpayment, loan is for $44K. a) Do I count the interest additionally paid on loan? b) Should I wait to report in 2023 when the credit is 30% as vs 26%?

[TaxGuyBill · Accepted solution]

If it was installed in 2022, the credit goes on the 2022 return. It is 30% for 2022.

Unless the solar production is being reported as business income, the loan interest does not affect anything.

[BobKamman]

If the loan is secured by the home, the interest will be deductible when paid (apparently, starting in 2023), subject to the limits on maximum mortgage debt.

Assuming "installed" means "placed in service." I've seen cases where the homeowner has to wait a month for final inspection and approval.