Federal Solar Energy Tax Credits and Savings

If you’re thinking of purchasing a home solar system, be sure to factor the solar federal tax credit into your decision.

​This 30% solar Investment Tax Credit (ITC) will save you thousands of dollars and accelerate your return on investment. Creating your own sustainable solar energy has never been more affordable.

​The ITC is applied directly toward the total cost of your solar system, which includes solar panels, installation, and a home battery to store the energy.

For example, if your solar system costs $19,000, you’ll save $5,700 in a dollar-for-dollar reduction on your income taxes from the Internal Revenue Service (IRS). ​Even better, when you go solar with Sunrun, our expert home solar guides will calculate your federal tax credit and pass the whole amount on to you, upfront. We directly deduct the ITC amount from your solar installation’s price.

​There’s no waiting for the next income tax year to redeem thousands of dollars. Plus, to receive the incentive payback, you’ll have no time-consuming IRS paperwork. We do it all for you. It’s that easy.

​What is the ITC?

​The sun is our most abundant and reliable renewable energy resource. The U.S. Energy Policy Act of 2005 created the solar ITC to harness the sun’s powerful potential.¹ ​A primary goal of the ITC is to create incentives for homeowners to go solar, spurring both financial and environmental benefits.

Per Section 25D of the U.S. Internal Revenue Code, the residential ITC is granted to homeowners who purchase a solar system outright and install it on their houses. When you go solar with Sunrun, you can take advantage of the ITC today. This credit provides a dollar-for-dollar reduction on your personal federal income taxes, and saves you more in taxes than a deduction.²

​Americans are increasingly demanding the freedom to create their own clean energy with solar and the government has paid attention. Currently, you can recoup a large portion of your total investment on a home solar system with the ITC.

However, the ITC’s percentage for residential solar installations is being reduced at the end of 2019. And, it’s scheduled to be eliminated at the end of 2021. ​So, time is of the essence. Take advantage of the ITC before it disappears.

At Sunrun, we know there’s a better way to power our lives. If you’re thinking of going solar, now is the best time to take control of your electricity. Start enjoying the comfort of energy freedom today.

A Smart Cash Credit⁷

​The ITC is a credit—not a refund. Therefore, the IRS will not be sending you a check. Your solar tax credit is subtracted, dollar for dollar, off the income tax you owe for the year you bought and installed your home solar system.

Cashing in on the ITC is a smart move for homeowners considering solar. You will save money upfront and throughout the lifespan of your home solar system.

The ITC equals 30% of your total solar purchase and installation costs—money that would otherwise go to the IRS. This total amount can also include the cost of a home battery, which allows you to store clean solar energy and use it when the sun isn’t shining or when electricity from the grid is priced high.

​For instance, if you spent $18K on rooftop solar system installed in 2019, you’re eligible for a 30% tax credit equal to $5,400. Then, if you owed $5,000 in 2019 federal income taxes, your IRS payment would be eliminated by the ITC credit amount.

​For the remaining $400 credit, you will not receive a check from the IRS. However, it can be directly applied to your next year’s income tax. That’s a lot of money to save or invest in brightening your future.

​It's easy. Sunrun passes this tax incentive directly on to you, upfront, by reducing your solar energy system's original price. You don’t have to figure out how to claim the solar energy tax credit on your IRS forms.

Energy Storage and the ITC

The primary ITC requirement is that you own your home solar system. When homeowners add a home battery, it must be charged at your home by an on-site renewable energy system like solar (not by the grid). This is necessary for the home battery to be considered renewable, and for its cost to be eligible for the ITC.

So, for your battery cost to be included in the tax credit, you must show that it’s only charged by renewable energy. To earn the ITC for your battery cost, Sunrun’s solar guides can easily help you document how your home battery is charged solar.

Join the Solar Revolution

The federal solar tax credit has been extended to 2021 to further solar adoption across the U.S. It enables a greater number of homeowners to install a home solar system since they can apply this incentive to reduce their overall cost.

With this legislation extension, homeowners may now claim the tax credit as soon as construction is completed, as long as it is operational by the end of 2023. Previously, the system had to be operational in order to claim the tax credit.

The notable caveat to the ITC extension is that the solar tax credit will be reduced on January 1, 2020. You'll save 30% today, but not next year. So there’s no better time to go solar than now.

Plus, other incentives are offered depending on your location. Sunrun solar advisors freely provide knowledge on all available incentives. We’ll ensure you receive your solar energy system with all possible incentives applied.

ITC Step-down Schedule from 2019 to 2022

​Here are the facts about the ITC tax credit step-down from 2019 to 2022:^8​

• Owners receive a 30% credit for systems installed by December 31, 2019.
• Owners receive a 26% credit for systems installed in 2020.
• Owners receive a 22% credit for systems installed in 2021.
• The residential solar ITC will be eliminated on January 1, 2022.
• Installing solar is an investment for today, next year and the long term. ​If you’re considering buying a home solar system, act today for the biggest tax incentive.

Solar Service Plans & the ITC¹²

The sun rises every day. Capture its energy for your home.

Many homeowners want to go solar, yet, they want to avoid the upfront cost of purchasing a system outright with cash. With a solar service plan, sometimes known as a “solar lease or Power Purchase Agreement,” you can be part of today’s solar revolution.

​Sunrun can readily help you with a solar service plan. With this option, however, homeowners do not directly receive the federal tax credit. Instead, Sunrun passes along the ITC financial benefits in the form of smaller monthly bills. You still get the benefits of the ITC, without having to pay for a system upfront.

Financing a home solar system through a solar service plan requires $0 down and no capital investment since it is funded through 3rd party ownership (or TPO). With a solar service plan, the ITC is leveraged by solar companies to reduce homeowner’s monthly electric costs.

Since the TPO owns the solar system, the TPO—not the homeowner—is eligible for all rebates, tax credits or other incentives. Yet, homeowners still benefit from incentives through lower electricity rates.

Sunrun and other solar installers pass on the savings to homeowners by decreasing their monthly electricity rates, based on the total value of incentives that the company receives.

With a solar service plan, instead of owning the rooftop solar system, the homeowner simply buys the energy produced by their installation. Having a solar service plan is similar to renting the solar energy system. You receive the monthly financial benefit of locked-in lower electric bills without the initial cost.

Benefits of a Solar Service Plan

Surely, many homeowners want to go solar, yet, there may be other priorities for their available funds. In such cases, a solar service plan is a wise choice since it offers monthly financial gains without the upfront costs of a direct purchase.

Choosing a solar service plan offers energy security, system maintenance, and the option for future ownership. In brief, benefits of a solar service plan include:^14,15,17

• No upfront cash investment. The home solar system is financed by a TPO.
• Immediate reduction in energy costs. A solar service plan’s energy rates are typically below market rates set by the electric company. A solar service plan can reduce a household’s electricity bill by 10 to 30% per month.
• Future buyout at a discounted cost. A home solar system may be purchased and owned outright after six years on the plan. Alternatively, at the plan’s conclusion, the TPO will either remove the solar installation or sell the system to you at fair market value.
• Predictable energy costs. A solar service plan offers homeowners a known schedule of energy rates throughout their contract term. Established electricity costs provide energy security versus the increasing and variable rates for electricity from the grid.
• High rate of return. With no upfront investment, a solar service plan can provide an uncapped financial return over the lifespan of a home solar system.

​It’s clear, Americans want clean, reliable solar power. A solar service plan can eliminate the capital costs for a home solar system.¹⁶ Moreover, homeowners across the country can leverage ITC’s benefits through a solar service plan or the direct purchase of a home solar system.

​Take Control Of Your Electric Bills by Going Solar Now

​Put the sun to work for you. When you purchase a Sunrun home solar system, the 30% federal investment tax credit is cut directly off the cost of your solar installation. That’s a reduction of thousands of dollars from the total price. ​

​To receive the greatest ITC benefit, go solar today. You’ll lock in long-term lower electricity prices and make the earth a healthier place for everyone. Plus, you don’t have to worry about researching incentives and filling out extra tax forms. We’ve got you covered.

Additionally,​ Sunrun’s home solar service plan is designed for your home characteristics, lifestyle, energy use, and financial goals. We’ll guide you through the process every step of the way from the ITC and installation to maintenance and monitoring.

Sunrun is the leading home solar installer in the United States. We've been providing renewable energy to homes for more than a decade, and every year the future gets brighter. Together, we're building an affordable and sustainable energy system for the whole nation, and next generation.

​When you’re ready to talk about solar for your home, Sunrun’s team is here for you. Contact us for a complimentary quote. Make a brighter tomorrow by starting today.