Solar Uniting Neighborhoods (SUN) Act of 2013

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. Short title This Act may be cited as the Solar Uniting Neighborhoods (SUN) Act of 2013 2. Clarification with respect to location of solar electric property (a) In general Paragraph (2) of section 25D(d) (2) Qualified solar electric property expenditure (A) In general The term qualified solar electric property expenditure (i) for use in a dwelling unit located in the United States and used as a residence by the taxpayer, or (ii) which enters the electrical grid at any point which is not more than 50 miles from the point at which such a dwelling unit used as a residence by the taxpayer is connected to such grid, but only if such property is not used in a trade or business of the taxpayer or in an activity with respect to which a deduction is allowed to the taxpayer under section 162 or paragraph (1) or (2) of section 212. (B) Recapture The Secretary may provide for the recapture of the credit under this subsection with respect to any property described in clause (ii) of subparagraph (A) which ceases to satisfy the requirements of such clause. . (b) Limitation with respect to off-Site solar property Subsection (b) of section 25D of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (3) Maximum credit for off-site solar property In the case of any qualified solar electric property expenditure which is such an expenditure by reason of clause (ii) of subsection (d)(2)(A), the credit allowed under subsection (a) (determined without regard to subsection (c)) for any taxable year with respect to all such expenditures shall not exceed $50,000. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 3. Clarification with respect to location of solar water heating property (a) In general Section 25D(d)(1) of the Internal Revenue Code of 1986 is amended— (1) by striking The term (A) In general The term , and (2) by adding at the end the following new subparagraph: (B) Off-site property (i) In general Such term shall include an expenditure for property described in subparagraph (A) notwithstanding— (I) whether such property is located on the same site as the dwelling unit for which the energy generated from such property is used, and (II) whether the energy generated by such property displaces the energy used to heat the water load or space heating load for the dwelling, so long as any such displacement from such property occurs not more than 50 miles from such dwelling unit, but only if such property is not used in a trade or business of the taxpayer or in an activity with respect to which a deduction is allowed to the taxpayer under section 162 or paragraph (1) or (2) of section 212. (ii) Recapture The Secretary may provide for the recapture of the credit under this subsection with respect to any property described in clause (i) which ceases to satisfy the requirements of such clause. . (b) Limitation with respect to off-Site solar property Paragraph (3) of section 25D(b) of the Internal Revenue Code of 1986, as added by section 2, is amended to read as follows: (3) Maximum credit for off-site solar property In the case of— (A) any qualified solar electric property expenditure which is such an expenditure by reason of clause (ii) of subsection (d)(2)(A), and (B) any qualified solar water heating property expenditure which is such an expenditure by reason of subparagraph (B) of subsection (d)(1), the credit allowed under subsection (a) (determined without regard to subsection (c)) for any taxable year with respect to all such expenditures shall not exceed $50,000. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 4. Exclusion of income from qualifying sales (a) In general Part III of subchapter B of chapter 1 is amended by inserting before section 140 the following new section: 139E. Income from qualifying sales of solar electricity For any taxable year, gross income of any person shall not include any gain from the sale or exchange to the electrical grid during such taxable year of electricity which is generated by property with respect to which any qualified solar electric property expenditures are eligible to be taken into account under section 25D, but only to the extent such gain does not exceed the value of the electricity used at such residence during such taxable year. . (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting before the item relating to section 140 the following new item: Sec. 139E. Income from qualifying sales of solar electricity. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Solar Uniting Neighborhoods (SUN) Act of 2013 - Amends the Internal Revenue Code to: (1) expand the definitions of "qualified solar electric property expenditure" and "qualified solar water heating property expenditure" to allow a residential energy efficient property tax credit for solar energy property which is either installed in a taxpayer's residence or is located within 50 miles of such residence; and (2) exclude from gross income, for income tax purposes, gain from the sale or exchange of electricity generated by solar energy property eligible for such tax credit.