The Residential Federal Solar Tax Credit is available for individuals who own a solar energy system.
This credit is valid on first or second residential properties, but not on rental properties. This means that if you have a solar energy system and you paid for it out of pocket (or secured a loan to purchase it) you may be eligible for the Residential Federal Solar Tax Credit. This generally applies to homeowners who signed a Full Purchase Agreement or Monthly Loan Agreement.
If we installed the solar energy system on your home, but you do not own the equipment yourself, you will not be eligible for the credit. This mainly applies to homeowners who signed a Monthly Lease Agreement or Full Lease Agreement. In those cases, our company is the owner of the system and, thus, we can claim the solar ITC for businesses. It’s still a benefit to you though because the benefit from this credit is a part of why we can offer the low installation costs and great rates that make solar an option to so many people who aren’t interested in the purchase or loan options mentioned above.
What can I claim in order to get federal solar tax credits?
You can claim your solar panels, solar equipment, solar battery, and/or the cost of labor performed as part of the solar system installation process.
What is the timeframe to take advantage of federal solar tax credits?
We recommend referencing the time breakdown listed above, but here is another way of looking at it:
Residential Federal Tax Credit
|For systems installed:
On or before December 31, 2019
January 1–December 31, 2022
January 1–December 31, 2023
On or after January 1, 2024
When can I claim federal solar tax credits?
When you file your income tax return for the applicable year. Just be sure to consult with your tax advisor and (according to the IRS) fill out Form 5695 as part of your tax return for the applicable year.
Where can I get more information about federal solar tax credits?
Again, we feel it’s always best to first speak with your tax advisor. They know your personal situation and can direct you on how to go about applying for and collecting your tax credit benefits. Aside from that, we like the resources provided by energy.gov. They are a credible organization and have a ton of great information that will go over solar tax credits in more detail for you.