Solar curtain walls qualify for federal tax credits, the IRS ruled privately. A curtain wall is tinted glass installed in place of a window in a building with a thin solar panel embedded in the glass to generate electricity. The IRS said a 30% investment tax credit can be claimed on the cost, even though structural components of buildings generally do not qualify for tax credits. It described the curtain wall as more a piece of machinery than a structural component of a building. The ruling is interesting because the IRS usually takes the position that solar equipment that is put to a dual use can only qualify for a tax credit to extent it is used at least 75% of the time as a solar device and then the credit is the share of solar use above that. For example, if the equipment is used 80% of the time as a solar device, then only 80% of the full tax credit can be claimed, and the credit is subject to partial recapture to the extent the percentage drops in any of the next four years after the equipment is put into service. The IRS said in this case that a full credit is allowed. The IRS lawyer who worked on the ruling said he did not see any dual use of the window. It serves a “dual purpose,” the ruling said, but it is not put to dual use. It is basically a solar panel that happens to have been installed on the side of the building rather than the roof. The ruling is Private Letter Ruling 201043023. The agency released a redacted copy in late October.

By Keith Martin