It’s come to our attention that the IRS has introduced a new policy involving audits of the solar tax credit. While this appears to be a standard procedure and there have been no issues with the tax credit itself, there has been some confusion about certification of the equipment. Many auditors have been requesting information on the energy efficiency of the equipment, which seems to be an error on their part, as this information is only available for solar heating systems.
The requirement for certification is required for solar thermal but is not required for photovoltaic solar. Below is a screenshot from the instructions to form 5695:
Furthermore, the tax credit for photovoltaic solar falls under Section 25D(a)(1), not Section 25D(a)(2), which is for solar water heating. Here it is straight from the tax code:
However, efficiency standards are required for batteries being that they must have a capacity of 3kWh or more to qualify (from IRS Fact Sheet FS-2024-15:
