The Data
Room.

It has been in the U.S. Tax Code since 1978 and corporations and institutions — such as Goldman Sachs, UBS, Apple, Amazon, Tesla, and American Express — have been using this strategy on scale projects for more than four decades. It has never been offered to retail clients at the $100,000 scale, until now. The strategy is based on U.S. Tax Code, Title 26, § 38 and § 46, which incentivizes U.S. taxpayers to redirect their tax dollars, invest in solar assets, and provides for the dollar-for-dollar tax credit and state and federal depreciation.

The law is on the books until 2032.

That language was inserted into the OBBBA to provide contractors extra time to preserve the ITC, should they be unable to complete construction by December 31, 2027. This primarily pertains to commercial and utility scale projects, due to the long lead time. Since our clients purchase residential projects, there is no risk of projects not being completed by December 31, 2027.

We provide our clients with proof of FEAC and energy community compliance.

No. It is a direct investment in solar assets which, given the tax code, satisfies your current tax liability at a discount.

This is not an investment in the classic sense of the term. Just like when you owe money to the IRS without this strategy, the money owed (the "principal") that leaves your wallet does not get returned to you. It is easier to understand this strategy by thinking of the benefit as a discount to your taxes owed. In other words, there will be less money out of pocket than if you had not engaged in this strategy.

No. This is a redirection of tax dollars owed. There is no change in household income. You simply stop paying quarterly taxes, or if you are a W-2 earner, you revise your W-4 so that the least amount of taxes are taken out, and you redirect those funds to purchase solar assets.

We will form an LLC on your behalf, manage the installation of the solar projects on residential properties, and provide you with bill(s) of sale. We oversee maintenance, insurance, and warranties on the solar assets through a technical services agreement. We issue IRS Form 3468 for you that your tax professional will submit alongside your 1040 for the previous tax year.

Excess tax credits may be used to refund taxes already paid going back up to three tax years on a reverse waterfall, while depreciation may be carried forward for twenty years. With bonus depreciation you receive full depreciation in year 1 with assets state level depreciating typically following MACRS. Tax savings are permanent and not subject to recapture if the assets are held for 6 years. Starting in year seven, homeowners may purchase the assets from the taxpayer at fair market value, or maintain the relationship and pay the taxpayer an annual maintenance fee.

The federal Investment Tax Credit, or ITC, is generally equal to 30% of the eligible tax basis of a qualifying solar energy system. In certain cases, the credit may be higher if the project qualifies for available bonus adders. For example, qualifying projects located in designated energy communities may be eligible for an additional 10% ITC adder. Projects that satisfy applicable domestic content requirements — generally relating to the use of U.S.-produced steel, iron, and manufactured products — may also be eligible for an additional 10% ITC adder.

No. There is no recapture tax if the client maintains ownership for six years.

This strategy provides savings for clients who reside in states without income taxes.

No. These solar projects are installed throughout the United States on other people's residential and small commercial roofs.

Your LLC or corporation will own the solar assets and you will receive a bill of sale and corresponding tax certificates proving ownership that are filed alongside your 1040. Balcony Advantage and our solar developer monitors, warrants, and insures all solar projects for twenty years.

Taxpayers are not taking construction risk or payment risk. Balcony's strategy is focused on completed residential solar systems that have already been installed, acquired, and placed in service. This means the taxpayer is not funding construction, waiting for systems to be built, or relying on future installation milestones in order for the credit to be created. Balcony's role is to source, acquire, document, aggregate, and transfer credits from completed solar assets. If an asset does not meet Balcony's acquisition, documentation, or diligence requirements, it is not included in the transferable credit pool.

No. The IRS requires that individuals keep a log of their material participation, which is 100 hours per year. C-Corps have no material participation requirement. The personalized client portal handles all onboarding documents and provides a personalized URL so clients can track their assets and keep a log of their material participation. The portal contains documents, schematics, drawings, podcasts, videos, installation contracts, tax referral letters, IRS tax codes, case studies, worksheets, and more for review.

No K-1s are issued from us or the LLC. The only exception is if the LLC is filed as a partnership (e.g., husband and wife). Otherwise, there is no K-1. If filed as a partnership, the members would issue the K-1 to each other — it would never come from us.

You will receive a year-end tax reporting package designed to help you and your CPA prepare the relevant federal and state tax filings for your solar asset investment. The tax package includes: Ownership Summary, Asset Details, Form 3468 Guide, Form 3468 Increased Credit Amount Statement, Domestic Content Certification Statement, Energy Production Revenue Recognition Report, and Journal Entry View of Assets. These materials are intended to provide your CPA with the information needed to report the Investment Tax Credit, including the underlying asset information, eligible basis, placed-in-service support, applicable credit percentage, and any bonus credit documentation.

Service agreements (insurance, warranty, operations) are between the service provider and the LLC. Our existence is an irrelevant component of those agreements.

Decades.

Balcony provides audit-support coordination for taxpayers and their CPA. This includes helping organize and provide the underlying project documentation, coordinating with relevant advisors and counterparties, and supporting responses to questions regarding the solar assets, eligible basis, placed-in-service status, transfer documentation, and related diligence materials.

Balcony Advantage is the New York-based sales office that works closely with our solar developer on all facets of the business including operations, installations, management, warranties, tax preparation, and beyond. Our solar developer, formed in 2017, has repurposed $500M of tax equity for over 400 clients or taxpayers. The tax strategy has been certified by many firms, including Novogradac, a leader in the renewable energy field.

Everyone at our solar development firm employs this strategy on behalf of their families, and the founding members of Balcony Advantage began employing this strategy in 2025.