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The solar investment tax credit (ITC)
The investment tax credit (ITC), also known as the federal solar tax credit, allows you to claim 30% of the cost of installing a solar energy system as a credit towards your federal tax liability. The average EnergySage Marketplace shopper saves nearly $6,000 on the cost of going solar as a result of the ITC – it’s available for both residential and commercial solar panel systems, and there is no cap on its value.
Disclaimer: This article is intended to provide an informational overview of the Federal Solar Tax Credit for interested homeowners. It is not intended to serve as official financial guidance. Readers interested in installing solar products should use their best judgment and seek advice from a licensed professional before making any purchase or investment.
Common questions
How do I claim the solar tax credit?
You can claim the credit when you file your yearly tax return, for the first year your solar panel system was installed and turned on. Our step-by-step guide can walk you through the proper process and forms to submit when claiming the ITC.
What costs are covered by the tax credit?
Any costs related to installing your solar panel system, including:
- Cost of solar panels
- Labor costs for installation, including permitting fees, inspection costs, and developer fees
- Any and all additional solar equipment, like inverters, wiring, and mounting hardware
- Home batteries charged by your solar equipment
- Sales taxes on eligible expenses
Can I roll over unused credit?
Yes – if you don’t have sufficient tax liability to take advantage of the full ITC value, you can roll over the credit into next year.
Is the tax credit refundable?
No – the ITC is a tax credit, not a tax refund. This means you can’t take advantage of this incentive if you don’t have a federal tax liability or owe anything in taxes.
Can I claim the solar tax credit if I lease my solar panel system?
No – you’re only eligible for the tax credit if you own your solar energy system.