The Internal Revenue Service has released a redacted copy of its private letter ruling 201809003 in which it concluded that a battery energy storage system charged 100% from an onsite solar system is eligible for the individual tax credit under Section 25D.
In the Letter Ruling, the Service reasoned that the "Battery meets the definition of a "qualified solar electric property expenditure" under ยง 25D(d)(2) of the Code" based on the taxpayer's representation that "all energy that is used to charge the Battery can be effectively assured to come from the Solar Energy System" to which it would be interconnected.
It may be worth considering whether individuals owning stand-alone shared systems (which were earlier deemed eligible for the 25D credit under a separate Private Letter Ruling that we wrote about here) could benefit from adding storage and taking the 25D tax credit.
As we noted then, we should note now that developers and individuals ought to review this and any other PLR with their own tax counsel, accountants, and tax preparers in light of their own specific facts. Although, by law, a PLR cannot be used or cited as precedent by other taxpayers, several cases acknowledge that a private letter ruling can be used as 'persuasive authority' or an 'instructive tool' by courts, IRS personnel and practitioners. In general, private letter rulings also may be used by the IRS in its own interpretations, including by IRS employees who might consider it in issuing private letter rulings to similarly situated taxpayers.
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