The federal solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar PV system paid for by the taxpayer. The federal solar tax credit is available to residential and commercial property owners, as well as nonprofit organizations. Currently, the federal solar tax credit stands at 30 percent. 

In order to claim the federal solar tax credit, you'll need to first determine if you're eligible, then complete IRS form 5695 and finally add your renewable energy tax credit information to Schedule 3 and Form 1040. 

Once you’ve determined your eligibility status for the tax credit, you need to collect all the forms you need to claim the credit. These forms include:

• IRS Form 5695
• Instructions for Form 5695
• IRS Form 1040
• Instructions for Form 1040

*Note: Above forms for reference use only. Be sure to download directly from the IRS once the current tax year’s forms have been released.

One may claim a tax credit for each qualifying purchase of solar, but may do so only once for each purchase. For example: if you were to purchase a 5kW system today for $20,000, you would receive a $6,000 credit. If several years later you were to purchase an additional 4kW system for $16,000, you would receive a $4,800 credit for that purchase.

No, the federal solar tax credit program does not issue a refund check.

If you are a property owner in the U.S. who purchased and installed solar that meets the IRS’s specific requirements, you qualify for the federal solar tax credit. Here are the specific qualifications:

• You must have a PV system that was installed between January 1, 2017, and December 31, 2034.
• Your system must be located on your property in the U.S.
• You own the system (purchased with cash or through financing)
  OR
• You purchased an interest in an off-site community solar project

• The PV system is new and you are using it for the first time

If your tax bill is less than your federal solar tax credit, the credit will rollover to next tax year.

The solar tax credit is only available to you if you own the solar panel system. If you lease the PV system, you cannot take advantage of the solar tax credit.

Generally, yes, you can claim a solar tax credit on expenses related to a new solar PV system that were installed on your new home—assuming the builder did not initially claim the tax credit.

The Inflation Reduction Act of 2022 increased the federal solar tax credit from 26 to 30 percent for systems installed between 2022 and 2032. That 30 percent will not hold forever. The tax credit will decrease to 26 percent for systems installed in 2033 and to 22 percent for systems installed in 2034. In 2035 the tax credit will expire unless congress renews it.