The federal solar tax credit is one of the most effective tools for reducing the cost of a new solar system. Also known as the Investment Tax Credit (ITC), it enables property owners to deduct installation expenses from federal taxes.
What Is the Solar Investment Tax Credit?
The ITC permits claimants to deduct 30 percent of the total cost of your solar energy system as a credit on your federal tax return. This encompasses panels, labor, permitting, wiring, and battery storage when installed simultaneously.
Example: A $20,000 system yields a $6,000 credit.
Who Qualifies for the Solar Tax Credit?
- You own the solar system (not leasing it)
- The system is installed on your primary/secondary residence or commercial property
- Installation completes during the tax year claimed
- You have taxable income to apply the credit toward
Both residential and commercial owners qualify if the system is new and unused.
How to Claim the ITC
- Complete IRS Form 5695 when filing federal taxes
- Enter the final system cost
- Calculate your credit and transfer the amount to Form 1040
Consult a licensed tax professional to ensure you apply it correctly.
Why It Matters
The 30% credit substantially reduces out-of-pocket expenses, improves return on investment, and shortens the system payback period.
Sunblaze Energy guides customers through incentives and provides savings projections. Contact us to get started.