II 

113TH CONGRESS 

1ST SESSION S. 1225 

To amend the Internal Revenue Code of 1986 to provide that solar energy 

property need not be located on the property with respect to which 

it is generating electricity in order to qualify for the residential energy 

efficient property credit. 

IN THE SENATE OF THE UNITED STATES 

JUNE 26, 2013 

Mr. UDALL of Colorado introduced the following bill; which was read twice 

and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

that solar energy property need not be located on the 

property with respect to which it is generating electricity 

in order to qualify for the residential energy efficient 

property credit. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Solar Uniting Neigh5 borhoods (SUN) Act of 2013’’. 


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1 SEC. 2. CLARIFICATION WITH RESPECT TO LOCATION OF 

2 SOLAR ELECTRIC PROPERTY. 

3 (a) IN GENERAL.—Paragraph (2) of section 25D(d) 

4 of the Internal Revenue Code of 1986 is amended to read 

5 as follows: 

6 ‘‘(2) QUALIFIED SOLAR ELECTRIC PROPERTY

7 EXPENDITURE.— 

8 ‘‘(A) IN GENERAL.—The term ‘qualified 

9 solar electric property expenditure’ means an 

10 expenditure for property which uses solar en11 ergy to generate electricity— 

12 ‘‘(i) for use in a dwelling unit located 

13 in the United States and used as a resi14 dence by the taxpayer, or 

15 ‘‘(ii) which enters the electrical grid at 

16 any point which is not more than 50 miles 

17 from the point at which such a dwelling 

18 unit used as a residence by the taxpayer is 

19 connected to such grid, but only if such 

20 property is not used in a trade or business 

21 of the taxpayer or in an activity with re22 spect to which a deduction is allowed to 

23 the taxpayer under section 162 or para24 graph (1) or (2) of section 212. 

25 ‘‘(B) RECAPTURE.—The Secretary may 

26 provide for the recapture of the credit under 


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•S 1225 IS

1 this subsection with respect to any property de2 scribed in clause (ii) of subparagraph (A) which 

3 ceases to satisfy the requirements of such 

4 clause.’’. 

5 (b) LIMITATION WITH RESPECT TO OFF-SITE SOLAR

6 PROPERTY.—Subsection (b) of section 25D of the Internal 

7 Revenue Code of 1986 is amended by adding at the end 

8 the following new paragraph: 

9 ‘‘(3) MAXIMUM CREDIT FOR OFF-SITE SOLAR

10 PROPERTY.—In the case of any qualified solar elec11 tric property expenditure which is such an expendi12 ture by reason of clause (ii) of subsection (d)(2)(A), 

13 the credit allowed under subsection (a) (determined 

14 without regard to subsection (c)) for any taxable 

15 year with respect to all such expenditures shall not 

16 exceed $50,000.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 the date of the enactment of this Act. 

20 SEC. 3. CLARIFICATION WITH RESPECT TO LOCATION OF 

21 SOLAR WATER HEATING PROPERTY. 

22 (a) IN GENERAL.—Section 25D(d)(1) of the Internal 

23 Revenue Code of 1986 is amended— 

24 (1) by striking ‘‘The term’’ and inserting the 

25 following: 


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1 ‘‘(A) IN GENERAL.—The term’’, and 

2 (2) by adding at the end the following new sub3 paragraph: 

4 ‘‘(B) OFF-SITE PROPERTY.— 

5 ‘‘(i) IN GENERAL.—Such term shall 

6 include an expenditure for property de7 scribed in subparagraph (A) notwith8 standing— 

9 ‘‘(I) whether such property is lo10 cated on the same site as the dwelling 

11 unit for which the energy generated 

12 from such property is used, and 

13 ‘‘(II) whether the energy gen14 erated by such property displaces the 

15 energy used to heat the water load or 

16 space heating load for the dwelling, so 

17 long as any such displacement from 

18 such property occurs not more than 

19 50 miles from such dwelling unit, 

20 but only if such property is not used in a 

21 trade or business of the taxpayer or in an 

22 activity with respect to which a deduction 

23 is allowed to the taxpayer under section 

24 162 or paragraph (1) or (2) of section 

25 212. 


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1 ‘‘(ii) RECAPTURE.—The Secretary 

2 may provide for the recapture of the credit 

3 under this subsection with respect to any 

4 property described in clause (i) which 

5 ceases to satisfy the requirements of such 

6 clause.’’. 

7 (b) LIMITATION WITH RESPECT TO OFF-SITE SOLAR

8 PROPERTY.—Paragraph (3) of section 25D(b) of the In9 ternal Revenue Code of 1986, as added by section 2, is 

10 amended to read as follows: 

11 ‘‘(3) MAXIMUM CREDIT FOR OFF-SITE SOLAR

12 PROPERTY.—In the case of— 

13 ‘‘(A) any qualified solar electric property 

14 expenditure which is such an expenditure by 

15 reason of clause (ii) of subsection (d)(2)(A), 

16 and 

17 ‘‘(B) any qualified solar water heating 

18 property expenditure which is such an expendi19 ture by reason of subparagraph (B) of sub20 section (d)(1), 

21 the credit allowed under subsection (a) (determined 

22 without regard to subsection (c)) for any taxable 

23 year with respect to all such expenditures shall not 

24 exceed $50,000.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 4. EXCLUSION OF INCOME FROM QUALIFYING SALES. 

5 (a) IN GENERAL.—Part III of subchapter B of chap6 ter 1 is amended by inserting before section 140 the fol7 lowing new section: 

8 ‘‘SEC. 139E. INCOME FROM QUALIFYING SALES OF SOLAR 

9 ELECTRICITY. 

10 ‘‘For any taxable year, gross income of any person 

11 shall not include any gain from the sale or exchange to 

12 the electrical grid during such taxable year of electricity 

13 which is generated by property with respect to which any 

14 qualified solar electric property expenditures are eligible 

15 to be taken into account under section 25D, but only to 

16 the extent such gain does not exceed the value of the elec17 tricity used at such residence during such taxable year.’’. 

18 (b) CLERICAL AMENDMENT.—The table of sections 

19 for part III of subchapter B of chapter 1 of such Code 

20 is amended by inserting before the item relating to section 

21 140 the following new item: 

‘‘Sec. 139E. Income from qualifying sales of solar electricity.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to taxable years beginning after 

24 the date of the enactment of this Act. 

Æ 


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