Reflective roof surfaces that are installed alongside photovoltaic cells are considered part of the solar equipment rather than the roof, the IRS said in a private ruling.

Businesses installing such equipment can claim a Treasury cash grant or investment tax credit on the cost.

A knitting company asked the question. It planned to install solar cells to generate electricity on its roof, but the cells were in a cylindrical shape, with half the cells on the underside of the cylinder facing away from the sun. Spaces between cells let sunlight pass through. The company planned to put a reflective surface on the roof to reflect the sunlight back up to the cells on the underside of the cylinder.

The IRS made the ruling public in late November. It is Private Letter Ruling 200947027. 

Keith Martin