Rev. Rul. 84-34

1984-1 C.B. 9, 1984-10 I.R.B. 6.

                       Internal Revenue Service
                                 Revenue Ruling

                RESIDENTIAL ENERGY CREDIT;  PASSIVE SOLAR SYSTEM

                            Published: March 5, 1984

SECTION 44C. - -RESIDENTIAL ENERGY CREDIT, 26 CFR 1.44C-2: Definitions

  Residential energy credit;  passive solar system.  Passive solar heating system components, whose sole purpose is to use or transmit solar radiation, qualify for the residential energy credit;  other parts with a dual function do not qualify for the credit.

ISSUE

  What components of the passive solar heating system described below qualify for the residential energy credit.

FACTS

  The taxpayer builds a lean-to addition onto the taxpayer's principal residence.  The lean-to addition is a glass and metal enclosure (solarium) approximately 15 feet long, 8 feet wide and 8 feet high, with a sloping glass roof that attaches to the south wall of the dwelling.  The first floor of the dwelling is approximately 3 feet above grade level and the floor of the solarium is constructed at the same level.  To support both the solarium floor and its structure, a concrete foundation is built on the three sides.  The floor of the solarium is covered with a dark colored ceramic tile. The space under the floor is converted into a heat storage area being completely lined with 2-inch thick rigid insulation and containing barrels filled with water.  A duct has been provided to allow warm air from the storage area to flow through the wall of the original dwelling into the basement.  This duct is equipped with a damper to regulate the flow of air and is connected to the return air pleum of the conventionally fueled house furnace.  A sliding glass patio door is located between the residence and the solarium. An air louver is also installed in the original house wall into the solarium to allow cooler air to return to the solarium.  All the glass areas of the solarium can be shaded by close fitting roll-up movable insulation.  Grates in the solarium floor are connected to the ducts.  The solarium also has closable vents in the walls near the floor and in the roof for ventilation.  The dampers and vents are thermostatically controlled so that air can flow from the solarium into the heat storage area and back into the solarium, or from the solarium through the heat storage area and into the conventional heat distribution duct system of the house and back into the solarium.  The solarium heating system can also be disconnected from the house duct system and directly ventilated to and from the outside.

  The solarium is furnished with patio type chairs, a table and plants for decoration.  The room is sometimes used as a sitting room.

LAW AND ANALYSIS

  Section 1.44C-2(f)(3) of the Income Tax Regulations provides that in order to qualify as a passive solar heating system the system must contain all of the following:  a solar collection area, an absorber, a storage mass, a heat distribution method, and heat regulation devices.  A solar collection area is an expanse of transparent or translucent material that is positioned in such a manner that rays of the sun directly strike the absorber.  An absorber is a surface such as a floor which converts solar radiation into heat and transfers the heat to a storage mass.  A storage mass is material that receives and holds heat from the absorber and later releases heat to the interior of the dwelling.  The storage mass must be located so that it is capable of distributing the stored heat directly to the habitable areas of the dwelling through a heat distribution method.  The heat distribution method allows the release of heat by radiation or convection from the storage mass through airflow paths by openings or ducts to the habitable areas of the dwelling. Heat regulation devices are shading or venting mechanisms, to control the amount of solar heat admitted through solar collection areas and nighttime insulation to control the amount of heat permitted to escape.

  Section 1.44C-2(f)(4) of the regulations provides that to the extent that a passive or active solar system utilizes portions of the structure of a residence, only materials and components whose sole purpose is to transmit or use solar radiation are included within the term "solar energy property". Accordingly, materials and components that serve a dual purpose, e.g. are structural components of the dwelling, are not included in the term "solar energy property".  For example, windows (including clerestories and skylights) and greenhouses do not qualify as solar energy property. Any shading, venting and heat distribution mechanisms or storage systems that do not have a dual function will qualify.

  In order for any part of a passive solar heating system to qualify, the system must have the five features enumerated in section 1.44C-2(f)(3) of the regulations.  The glass in the lean-to structure constitutes the solar collection area;  the ceramic tile floor is an absorber, the barrels of water under the floor are the heat mass, the grates, ducts, louvers and thermostatic controls

are part of the heat distribution system;  the movable insulation and the vents in the walls and roof of the solarium are heat regulation devices. Thus, the system installed by the taxpayer meets the definition of a passive solar heating system and those parts that do not have a dual function are eligible for the residential energy credit.

  Because the lean-to solarium adds a usable habitable area to the house, it is considered a dual function device, being both a part of the solar system and a structural component of the dwelling.  Thus, the concrete foundation, all the glass area, which are windows or skylights, the rest of the structural parts of the lean-to, the floor including the ceramic tile, and the sliding patio door are all structural components of the dwelling that do not qualify because they have a dual function.

  However, other parts of the passive solar heating system whose sole purpose is to transmit or use solar radiation do qualify. These parts consist of the water barrels in the heat storage area, the insulation for the heat storage area, louvers and grates, thermostatic controls, all duct work to the point it meets the conventional house duct work, and the special movable insulation for the glass area.

  HOLDING

  The system described is a passive solar heating system as defined in section 1.44C-2(f)(3) of the regulations.  Parts of such a system whose sole purpose is that of transmitting or using solar radiation qualify for the residential energy credit.  Other parts that have a dual function do not qualify for the credit even though they are required to meet the definition of such a system.

Rev. Rul. 84-34, 1984-1 C.B. 9, 1984-10 I.R.B. 6.