What is the federal solar tax credit?

The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system. (Other types of renewable energy are also eligible for similar credits but are beyond the scope of this guidance.)

The system must be placed in service during the tax year and generate electricity for a home located in the United States. There is no bright-line test from the IRS on what constitutes “placed in service,” but the IRS has equated it with the completed installation.

In August 2022, Congress passed an extension of the ITC, which provides a 30% tax credit for systems installed in 2022-2032, and 26% for systems installed in 2033. After that, homeowners will have one more year to claim the tax credit which decreases to 22% before it disappears entirely.

There is no maximum amount that can be claimed.