Renewable Energy Source Expenditures Law and Legal Definition

Pursuant to 26 CFR 1.23-2 [Title 26 -- Internal Revenue; Chapter I -- Internal Revenue Service, Department of the Treasury], the term renewable energy source expenditures means “an expenditure made on or after April 20, 1977, and before January 1, 1986, by a taxpayer for renewable energy source property, or for labor costs properly allocable to the on-site preparation, assembly, or original installation such property, if both of the following conditions are satisfied:

(1) The renewable energy source property is installed in connection with a dwelling unit that is used as the taxpayer's principal residence when the installation is completed.

(2) The dwelling unit is located in the United States.”

Additionally, the term renewable energy source expenditures includes “expenditures made after December 31, 1979, and before January 1, 1986, for an onsite well drilled for any geothermal deposit or for labor costs properly allocable to onsite preparation, assembly, or original installation of such well, but only if the requirements of paragraphs (b) (1) and (2) of this section are met and the taxpayer has not elected to deduct any portion of such expenditures or allocable labor costs.

Eligibility as a renewable energy source expenditure does not depend on the date of construction of the dwelling unit. Thus, such expenditure may be made in connection with either a new or an existing dwelling unit. Renewable energy source expenditures need only be made in connection with a dwelling, rather than in or on a dwelling unit. For example, a solar collector that otherwise constitutes renewable energy source property is not ineligible merely because it is installed separately from the dwelling unit. The term renewable energy source expenditure" does not include any expenditure allocable to a swimming pool even when used as an energy storage medium or to any other energy storage medium whose primary function is other than the storage of energy. It also does not include the cost of maintenance of an installed system or the cost of leasing renewable energy source property.”