Tax Credits
Installing solar panels is a significant investment, but the long-term benefits outweigh the initial cost. Solar energy reduces electricity bills, boosts property value, and qualifies homeowners and businesses for tax credits.
What is a Tax Credit?
A tax credit reduces the amount you owe in taxes. If you owe $1,000 and qualify for a $1,000 tax credit, your tax liability becomes zero. Any unused portion may roll over to future years. The Investment Tax Credit (ITC) is a federal incentive for installing solar energy systems.
What is the Federal Solar Tax Credit?
Homeowners and businesses can claim a percentage of their solar system’s cost as a tax credit:
30% credit for systems installed between 2022 & 2032
No cap on the claimable amount
Consult a financial advisor for the latest tax credit details.
Am I Eligible for Solar Tax Credit?
You may qualify if:
✔ You own the system (purchased outright or financed, not leased)
✔ The system is installed between 2022 & 2032
✔ It is a new installation (not previously claimed on the same property)
✔ It’s installed on your primary or secondary U.S. residence
✔ Community solar projects qualify if they offset your home’s electricity consumption
What Costs Are Covered?
The 30% ITC covers:
Solar panels and PV cells
Installation (labor, permits, contractor fees)
Wiring, inverters, and mounting equipment
Energy storage batteries
Sales tax on eligible expenses
Other Solar Incentives & Their Impact
Several additional incentives may further reduce costs:
Utility Rebates: May lower installation costs but won’t affect your ITC
State Solar Rebates: Typically do not reduce federal tax credits
Renewable Energy Certificates (RECs): Considered taxable income but do not reduce ITC eligibility
Cash Rebates or Special Offers: May reduce the installation cost but not the tax credit
Visit the Database of State Incentives for Renewables and Efficiency for state-specific incentives.
How to Claim Your Solar Tax Credit
How to Claim Your Solar Tax Credit
Download IRS Form 5695
Enter your solar installation costs under "Qualified Solar Electric Property Costs"
Complete lines 6a, 6b, and 14-16 using the IRS Residential Energy Credit Worksheet
File with your annual federal tax return
Voltify - Powering Your Home Today
Solar tax credits make switching to renewable energy even more attractive. Along with reduced electricity bills and environmental benefits, tax savings can significantly offset your initial investment.