`(a)
Allowance of Credit- In the case of an individual, there shall be allowed as a
credit against the tax imposed by this chapter for the taxable year an amount
equal to the sum of--
`(1) 30
percent of the qualified photovoltaic property expenditures made by the
taxpayer during such year,
`(2) 30
percent of the qualified solar water heating property expenditures made by the
taxpayer during such year, and
`(3) 30
percent of the qualified fuel cell property expenditures made by the taxpayer
during such year.
`(b)
Limitations-
`(1)
MAXIMUM CREDIT- The credit allowed under subsection (a) for any taxable year
shall not exceed--
`(A)
$2,000 with respect to any qualified photovoltaic property expenditures,
`(B)
$2,000 with respect to any qualified solar water heating property expenditures,
and
`(C)
$500 with respect to each half kilowatt of capacity of qualified fuel cell
property (as defined in section 48(c)(1)) for which qualified fuel cell
property expenditures are made.
`(2)
CERTIFICATION OF SOLAR WATER HEATING PROPERTY- No credit shall be allowed under
this section for an item of property described in subsection (d)(1) unless such
property is certified for performance by the non-profit Solar Rating
Certification Corporation or a comparable entity endorsed by the government of
the State in which such property is installed.
`(c)
Carryforward of Unused Credit- If the credit
allowable under subsection (a) exceeds the limitation imposed by section 26(a)
for such taxable year reduced by the sum of the credits allowable under this
subpart (other than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable under subsection (a)
for such succeeding taxable year.
`(d)
Definitions- For purposes of this section--
`(1)
QUALIFIED SOLAR WATER HEATING PROPERTY EXPENDITURE- The term `qualified solar
water heating property expenditure' means an expenditure for property to heat
water for use in a dwelling unit located in the United States and used as a
residence by the taxpayer if at least half of the energy used by such property
for such purpose is derived from the sun.
`(2)
QUALIFIED PHOTOVOLTAIC PROPERTY EXPENDITURE- The term `qualified photovoltaic
property expenditure' means an expenditure for property which uses solar energy
to generate electricity for use in a dwelling unit located in the United States
and used as a residence by the taxpayer.
`(3)
QUALIFIED FUEL CELL PROPERTY EXPENDITURE- The term `qualified fuel cell
property expenditure' means an expenditure for qualified fuel cell property (as
defined in section 48(c)(1)) installed on or in connection with a dwelling unit
located in the United States and used as a principal residence (within the
meaning of section 121) by the taxpayer.
`(e)
Special Rules- For purposes of this section--
`(1)
LABOR COSTS- Expenditures for labor costs properly allocable to the onsite
preparation, assembly, or original installation of the property described in
subsection (d) and for piping or wiring to interconnect such property to the
dwelling unit shall be taken into account for purposes of this section.
`(2)
SOLAR PANELS- No expenditure relating to a solar panel or other property
installed as a roof (or portion thereof) shall fail to be treated as property
described in paragraph (1) or (2) of subsection (d) solely because it
constitutes a structural component of the structure on which it is installed.
`(3)
SWIMMING POOLS, ETC., USED AS STORAGE MEDIUM- Expenditures which are properly
allocable to a swimming pool, hot tub, or any other energy storage medium which
has a function other than the function of such storage shall not be taken into
account for purposes of this section.
`(4)
DOLLAR AMOUNTS IN CASE OF JOINT OCCUPANCY- In the case of any dwelling unit
which is jointly occupied and used during any calendar year as a residence by
two or more individuals the following rules shall apply:
`(A)
The amount of the credit allowable, under subsection (a) by reason of
expenditures (as the case may be) made during such calendar year by any of such
individuals with respect to such dwelling unit shall be determined by treating
all of such individuals as 1 taxpayer whose taxable year is such calendar year.
`(B)
There shall be allowable, with respect to such expenditures to each of such
individuals, a credit under subsection (a) for the taxable year in which such
calendar year ends in an amount which bears the same ratio to the amount determined
under subparagraph (A) as the amount of such expenditures made by such
individual during such calendar year bears to the aggregate of such
expenditures made by all of such individuals during such calendar year.
`(C)
Subparagraphs (A) and (B) shall be applied separately with respect to
expenditures described in paragraphs (1), (2), and (3) of subsection (d).
`(5)
TENANT-STOCKHOLDER IN COOPERATIVE HOUSING CORPORATION- In the case of an
individual who is a tenant-stockholder (as defined in section 216) in a
cooperative housing corporation (as defined in such section), such individual
shall be treated as having made his tenant-stockholder's proportionate share
(as defined in section 216(b)(3)) of any expenditures of such corporation.
`(6)
CONDOMINIUMS-
`(A)
IN GENERAL- In the case of an individual who is a member of a condominium
management association with respect to a condominium which the individual owns,
such individual shall be treated as having made the individual's proportionate
share of any expenditures of such association.
`(B)
CONDOMINIUM MANAGEMENT ASSOCIATION- For purposes of this paragraph, the term
`condominium management association' means an organization which meets the
requirements of paragraph (1) of section 528(c) (other than subparagraph (E)
thereof) with respect to a condominium project substantially all of the units
of which are used as residences.
`(7)
ALLOCATION IN CERTAIN CASES- If less than 80 percent of the use of an item is
for nonbusiness purposes, only that portion of the
expenditures for such item which is properly allocable to use for nonbusiness purposes shall be taken into account.
`(8) WHEN
EXPENDITURE MADE; AMOUNT OF EXPENDITURE-
`(A) IN
GENERAL- Except as provided in subparagraph (B), an expenditure with respect to
an item shall be treated as made when the original installation of the item is
completed.
`(B)
EXPENDITURES PART OF BUILDING CONSTRUCTION- In the case of an expenditure in
connection with the construction or reconstruction of a structure, such
expenditure shall be treated as made when the original use of the constructed
or reconstructed structure by the taxpayer begins.
`(9)
PROPERTY FINANCED BY SUBSIDIZED ENERGY FINANCING- For purposes of determining
the amount of expenditures made by any individual with respect to any dwelling
unit, there shall not be taken into account expenditures which are made from
subsidized energy financing (as defined in section 48(a)(4)(C)).
`(f)
Basis Adjustments- For purposes of this subtitle, if a credit is allowed under
this section for any expenditure with respect to any property, the increase in
the basis of such property which would (but for this subsection) result from
such expenditure shall be reduced by the amount of the credit so allowed.
`(g)
Termination- The credit allowed under this section shall not apply to property
placed in service after December 31, 2007.'.
(b)
Conforming Amendments-
(1)
Section 23(c) is amended by striking `this section and section 1400C' and
inserting `this section, section 25D, and section 1400C'.
(2)
Section 25(e)(1)(C) is amended by striking `this
section and sections 23 and 1400C' and inserting `other than this section,
section 23, section 25D, and section 1400C'.
(3)
Section 1400C(d) is amended by striking `this section'
and inserting `this section and section 25D'.
(4)
Section 1016(a), as amended by this Act, is amended by striking `and' at the
end of paragraph (33), by striking the period at the end of paragraph (34) and
inserting `, and', and by adding at the end the following new paragraph:
`(35) to
the extent provided in section 25D(f), in the case of amounts with respect to
which a credit has been allowed under section 25D.'.
(5)
The table of sections for subpart A of part IV of subchapter A of chapter 1, as
amended by this Act, is amended by inserting after the item relating to section
25C the following new item:
`Sec. 25D. Residential energy efficient property.'.
(c)
Effective Dates- The amendments made by this section shall apply to property
placed in service after December 31, 2005, in taxable years ending after such
date.