Solar Power Rocks logo

Solar Power Rocks - Clear info on home solar power rebates, tax credits, and other benefits

Frequently Asked Questions about the Federal Solar Tax Credit in 2020

Avatar for Ben Zientara
Published on 03/05/2019 in
Updated 02/04/2020

Questions about the solar tax credit

Note: The information below applies for people whose solar panel installations were fully interconnected and placed into service before midnight on January 1, 2020. The Federal Solar Tax Credit has now “stepped down” from 30 to 26 percent for all installations completed in 2020. The rest of this page applies to home solar installations completed during 2020.

The federal solar tax credit, also known as the Solar Investment Tax Credit, or ITC, is the single most successful and important solar incentive available in the United States. The ITC is a direct tax credit based on the cost to install a solar system, awarded to the system owner in the year after installation.

If your solar panel installation is fully interconnected and you receive permission to operate (PTO) before January 1st, 2021, you are entitled to a tax credit of up to 26% of your cost to install solar. If your system gets PTO in 2021, you’ll earn a 22% tax credit instead.

The solar tax credit is set to expire for all residential installations completed after 2021.

But that’s not all there is to learn. Let’s dive in to other important questions people have about the federal solar tax credit!

How the solar tax credit works

The ITC is a non-refundable tax credit, meaning you can’t take it unless you owe at least as much in income taxes as the credit would be. For example, the average-sized home solar installation can make about 6.7 kilowatts of power under full sun, and costs about $22,000 (about $3.30 per watt) before state solar incentives.

For that average system, the federal solar tax credit would be $5,720 (26% of $22k).

In order to take the full tax credit, you’d need to have a federal tax bill of at least $5,720. If you don’t owe that much in taxes, you can still take the full credit, but you’ll need to claim it over more than one year.

Note: when we say “federal tax bill” it doesn’t mean “what you owe on April 15th.” Instead, it means “total tax liability,” so if you pay in all year through pay check deductions, that money counts as taxes paid. If that amounts to $5,720, you can claim the whole credit.

And you don’t have to be rich to claim the solar tax credit. If you take the standard deduction and no other tax credits, you can probably claim the full solar ITC as a single person making more than $60,000, or a married couple making over $80,000.

Ready to install solar?

If you’re thinking about going solar and you want to know how the solar tax credit can benefit you, get in touch with one of our solar experts today.

If you’ve already installed solar, here’s some guidance on how to claim the solar ITC.

If you’d like to know answers to important questions about the tax credit, read on!

Without further ado, here is our solar tax credit FAQ:

  • Q: What is the solar tax credit?
  • A: Officially called the “solar investment tax credit” or ITC, it’s a dollar-for-dollar reduction in the federal tax bill of any homeowner who pays for a solar installation.

First enacted in 2005 and renewed in 2008 and 2015, the ITC is offered by the U.S. federal government for homeowners and commercial solar businesses to make solar more affordable.

  • Q: How much do I get back from the solar tax credit?
  • A: 26% of your costs to install solar, if you install before the end of 2020.

If you’re a homeowner who buys a solar panel system, you’re entitled to a tax credit of up to 26% of the total cost of that system. You can wipe out your entire tax bill if your credit is high enough, and you can take the credit over multiple years if you don’t owe that much in year 1. For example, if you spend $20,000 on a solar system, your 26% tax credit would be $5,200. But if you only owed $4,600 in taxes for the year, your tax bill will be reduced to zero, and you’ll receive an additional $600 tax credit on next year’s return.

  • Q: When will the solar tax credit expire?
  • A: Nope! The residential solar tax credit will continue at 26% through the end of 2020, then “step down” to 22% in 2021 and expire afterward.

Here’s what that looks like:

Stepping down the solar tax credit

That permanent 10% credit after 2022 will be given to companies who install and maintain solar systems and sell the power to another entity (homeowner, business, utility company, etc.) Of course, this assumes the Trump administration doesn’t decide to do away with the tax credit…

Claiming the credit is actually really easy, and like we mentioned above, it can wipe out your entire tax bill. Wow!

  • Q: Why are we subsidizing solar anyway? Shouldn’t the industry stand on its own two feet?
  • A: Lots of businesses get subsidies from the government, and solar is one of the most important future planning technologies there is!

We subsidize solar because it’s a key part of our nation’s plan to get off fossil fuels and help make a more reliable, sustainable energy future. But the ITC does more than that; the taxpayer investment in solar creates jobs, reduces prices for solar for everyone, and ensures this still-new industry grows large enough to sustain itself for long into the future.

Check out this handy graphic from the Solar Energy Industries Association (SEIA):

Benefits of the Federal Solar Tax Credit from SEIA

That’s a lot of benefit for our tax dollar investment, but it doesn’t even tell the whole story. A study conducted a few years ago by the U.S. Partnership for Renewable Energy Finance found that a dollar invested in reducing the cost of solar today returns an annual rate of 10% over a 30-year term, if you account for tax revenue from jobs created and leases and Power-Purchase Agreements (PPAs). That’s a huge rate of return, even as solar also saves homeowners money by reducing their electricity bills over 25 or 30 years!

And here’s another graph to put things in perspective a bit. The world’s top 20 countries by economic power (aka the G20) spend almost 4 times the amount on oil subsidies as the entire world spends on subsidies for renewable energy. Check out this chart:

comparison of subsidies for solar and fossil fuels

We hope you enjoyed reading our solar tax credit FAQ. Please feel free to pose additional questions in the comments section below, and we’ll incorporate the best ones in the body of this post.

Head on over to our post about how to claim the ITC:

Last modified: February 4, 2020

169 thoughts on “Frequently Asked Questions about the Federal Solar Tax Credit in 2020

  1. Avatar for Adam Adam says:

    Hi Ben, I appreciate all the advice you’ve given already. You’ve stated multiple times that rental properties are not eligible which is explicitly true under Section 25 of the tax code. However, it seems possible that an individual could use Form 3468 and claim the credit under the commercial rules (Section 48 & 50 of the tax code) and used to offset rental income. It doesn’t seem to state anywhere that only certain types of legal entities (i.e. LLC) can use this. Have you looked into this possibility?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Adam-

      The answer to your question seems to be “YES,” you can claim the Section 48 Investment Tax Credit on a solar installation you place into service on investment property. You can also, by the way, claim depreciation under the Modified Accelerated Cost Recovery System (MACRS), including 100% bonus depreciation.

      Of course, you should talk to your own expert financial consultants and a CPA before starting down this road, but it looks like very good news indeed for folks who want to install solar on the roofs of their rental properties.

  2. Avatar for r. gerald r. gerald says:

    my system is 15 years old and power is decreasing. i am replacing one string of panels and i have to buy a new inverter. the cost for all is $7000. do i qualify for refund providing my receipts?

    1. Avatar for Ben Zientara Ben Zientara says:


      You should be able to qualify for the federal solar tax credit for the costs associated with replacing the string of panels and the inverter. As long as you owe at least $1,820 (26% of $7,000) in taxes after all other credits, you can claim the credit by filing Form 5695 along with your taxes.

  3. Avatar for David David says:

    I am retired and don’t have much income so tyhe solar tax crediyt isn;t much help. I was wondering if my son paid for the solar system could he make take the credit? I would the pay him back for his net cost.

  4. Avatar for Shelly C Shelly C says:

    I am a realtor who is selling a home with solar panels. The loan has a balance of $24,000. What tax incentives can a buyer have if they take over the loan? Also, what can I say to the buyer that would make them feel comfortable taking over a loan that matures in 2038???in

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, Shelly-

      Unfortunately, there are no federal or state tax credits for assuming a solar loan. The benefits of solar tax credits accrue to the person who originally paid for the solar installation.

      That said, there are still benefits that could be compelling. If the loan payments are offset by energy bill savings, buying a solar home is basically the same as buying a regular home but with the added guarantee that the electric bill won’t go up by much, ever, and will eventually drop down to almost nothing. The value of the home should also remain higher than a non-solar home, but the added value will decline as the panels age. Your state may provide the benefit of a property tax exemption for that added value.

      It sounds like the homeowners who installed solar ended up with a 20-year loan, which probably means they didn’t get the best rate. It might be wise for the buyers to consider rolling the solar loan into the new mortgage, considering we’re seeing historically low mortgage rates. That would result in a single monthly payment and low electric bills. I suppose that all depends on whether their bank will approve the loan for more than the asking price.

  5. Avatar for Laura Laura says:

    Can an S Corp file for the solar tax credit if they are purchasing the system and selling the power to another entity like a school?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Laura-

      Yes, I believe they can. I think in the case of some churches with solar panels, the congregants formed an LLC (or maybe an S Corp), and purchased the solar installation, while the church got an inexpensive rate on the electricity generated by the system. That kind of arrangement is called a power purchase agreement (PPA). I’m not the expert on how to set that up (or the tax structure of both claiming the ITC and being assessed taxes on the income from the sale of electricity, but there are many people who are.

      You could reach out to a solar EPC contractor in your state to get a feel for how it might work. Here’s a list:

  6. Avatar for Bill A. Bill A. says:

    Hello, I own a rental property and am not an LLC. I’m pretty sure I won’t receive the Federal Tax credit of 26% for solar panel installation. Couldn’t I still write off the entire amount as a tax deduction though? Thanks for your help!

  7. Avatar for VC VC says:

    Hi, I am planning get solar installed next month on my current home. However, what if I buy a new home later in 2020 and move to the new home after the installation of solar. Will I still be qualified to claim the 26% credit? Please let me know. Thank you in advance.

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, VC-

      This might be a bit touchy, but as I understand it, if you pay the cost to put solar panels on a home you own, and the panels are fully interconnected and operating before you sell the home, you’re entitled to claim the credit for the costs. I’m not sure I understand exactly why you’d want to add the solar panels immediately before selling the home, without reaping the benefits of getting the solar energy to reduce your electric bills first.

      Solar panels do add value to a home, and they might be a selling point for a potential buyer, but the best estimates of how much value is added come out to around the total cost of the system after incentives. Put simply, adding solar to a home you plan to sell right after would basically be a wash, money-wise. Might be better to just wait and install solar on the new home you may be buying.

  8. Avatar for David David says:

    In 2019 i had a pv system put in and was able to claim the tax credit for 2019. I now have sold the home and took the pv system off and now going to installing it on the new home that i just purchased. Can I claim the solar tax credit for 2020 on the new home . Thanks.

  9. Avatar for Donna Donna says:

    Hi, Mom had solar panels added to our home Oct of 2019, did her taxes and the Credit was over $10K, but there was no additional money to her refund. What is it that I’m not understanding? Plus she has been made double payments to finish paying the loan faster.

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Donna-

      The federal solar tax credit is limited by tax liability. That is, your mom can only get back up to what she would have paid in taxes in any given year. Unfortunately, if she hasn’t got much income, she won’t be able to claim the tax credit until her tax burden increases.

  10. Avatar for Chuck Chuck says:

    I installed a solar array on my home in 2019 and received the tax credit. Now I want to add panels to the array to produce more energy while still not exceeding 100% of my usage. May I claim a credit on 2020 taxes in 2021 for the additional costs?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Chuck-

      The answer is yes, you can claim the solar tax credit for new costs incurred while adding solar panels. You might want to speak with a tax specialist to see whether certain related expenses qualify, like the cost of replacing an old inverter with an updated one that can handle the larger system size (if applicable).

  11. Avatar for May May says:

    Ok so I was told by the solar rep that after we get our 30% fed tax credit and the state credit, we had to give it to them or our Monthlysolar bill would go up by $50. For us the fed tax credit was $10,500 and the state credit was a Max of $1000. Is that true? We have to give it back to the loan to reduce it our loan keep paying the bill amount we do now? I don’t know if I’m making sense. Please help!

    We also just got back $8700 in fed tax Refund due to owing taxes and just $400 for state tax refund because we also owed.

    I’m confused

    1. Avatar for David Van Horn David Van Horn says:

      I was told the very same thing by my solar installer only I was told my payment wouldn’t change for 18 months. I told my installer I would pay cash instead,but I wanted a discount. As a result I got the full rebate and a 2k discount on the system I purchased.

    2. Avatar for Ben Zientara Ben Zientara says:

      Hey May-

      This payment of your tax credit to the principal of the loan is known as a “balloon payment,” and is used to keep the monthly costs of paying for the loan down below your former electric bill. Honestly, we don’t like the balloon payment much, because it’s hard to explain and difficult for most homeowners to come up with (even though they are getting the tax credit). This is the way most solar loans work, and it seems it was not explained to you in detail before you purchased your solar panels.

      David’s comment about getting a discount for paying cash makes sense. Many solar financing companies charge a dealer fee or financing charge to the installer, which gets passed on to the homeowner in increased initial price. If a person is considering paying for solar with a loan, we recommend a HELOC for the lowest rates and simple repayment (even though it’s much tougher to get a HELOC).

      That said, it might actually be in your best interest to pay the $50 per month in increased solar loan payments and keep the $9,100 you got in refunds. having cash liquidity now is better than increased loan payments over the long term. On a 15 year loan, $50 per month is $9,000 total, but paid out long into the future, while your electricity bill would have eventually cost you that much extra anyway.

      I hasten to add that I am NOT a financial advisor, so definitely talk to someone who is licensed and an expert. This is just my 2 cents.

  12. Avatar for SUZANNE SUZANNE says:

    Does this count for solar pool heating?

  13. Avatar for Phillip Phillip says:

    We got solar in 2019 for 27800 so 30% tax credit is 8350 but why am I only getting 2800 of the tax credit right now?

    1. Avatar for Ben Zientara Ben Zientara says:


      The amount of the solar tax credit cannot exceed what you would have owed to the government after all other calculations are complete. This final number is called your “tax liability,” and there are only a few kinds of tax credits that can exceed it. If you expect to have about the same income next year, you can expect to receive about the same tax credit again in your 2020 taxes, and can continue to claim the credit until you’ve received the total amount back.

  14. Avatar for David David says:

    Hi, we installed solar panels at our home in 2019 And will claim our tax credit for 2019. Just bought a Tesla this year and planned to add additional 6 more panels for the usage of the vehicle. My question is will I be able to claim for the additional panel in 2020 and receive tax credit? Thank you!!


  15. Avatar for Veronica Hernandez Veronica Hernandez says:

    We purchased our solar in 2019, now were receiving some of the tax credit. However, if we decide to sell our home in 2020, would we receive the rest in 2020 taxes, even though we sold our home?

    1. Avatar for Ben Zientara Ben Zientara says:


      As I understand it, yes. All that matters is that you owned the home and paid for the installation with cash or a loan. Once you’ve filed the 2019 tax credit, that excess is left for you to claim for as long as it takes to get it all. And the good news is the solar should help sell your home faster and for more money!

  16. Avatar for Tom Tom says:

    Can two unmarried people who jointly own the home and the solar panels both claim the tax rebate for the solar cost?

  17. Avatar for Akay Akay says:

    Hi, I am in the process of getting solar panels installed in Feb 2020 and we might rent out this property later down this year due to my job situation. Will we still be able to claim the Feb Tax credit as it was out primary home while installation but later turned into Rental?

  18. Avatar for Dan-NM Dan-NM says:

    If I have an existing system, but believe I should purchase spare parts to make the system reliable, can the cost of the spare parts be used for a solar ITC?

  19. Avatar for mike mike says:

    I have a solar system installed about 4 months ago the finance company made a mistake and only financed $12,000 of a$ 22,000 system I paid the $12,000 cash in full now the solar company ‘sun power’ want the balance $10,000 paid in full I have agreed to make payments with them .my question is will I be able to get the full 30% tax credit on the full amount of $22,000 or do I have to be paid in full?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Mike-

      Great question, and sorry you’re facing payments on $10,000 that wasn’t included in the financing. But I think we have some good news for you: The federal tax credit applies to the entire cost of a solar system. Provided your system was placed into service (i.e. interconnected and feeding back to the grid) this year, you’re eligible for 30% of the total cost, or $6,600 of the $22,000.

      That should make the payments on that remaining $10k a bit easier, provided you can take advantage of the full credit. Just use form 5695 when you or your preparer fill out your taxes.

      Thanks for the question, and have a good one!

  20. Avatar for Andy Andy says:

    Does “placed into service” mean:
    a.) after the authority-having-jurisdiction signs-off on the permit, or
    b.) after the utility gives permission-to-operate?

    I’m asking this question with regards to residential installs.

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Andy-

      You’ve asked the million-dollar question, and the IRS is frustratingly unclear about what exactly this means, even in their recent Section 25D guidance from October of 2019. In general, I’d say it’s best to wait until the system is fully interconnected and sending power to the grid—after Permission to Operate (PTO) is granted by the utility.

      HOWEVER… there might be legal ground to stand on that says once the homeowner has control of and liability for the system and it’s be certified to be operable, that’s “placed into service” right there. The folks over at Power And Taxes did an analysis of what PTO means when it comes to the section 45 ITC (the one for commercial and industrial installs), and came up with several references to cases in which everything from cars to solid waste burning facilities were considered to have “placed into service” simply by having been built, even when they weren’t being used for their final purpose. Now, take this with a grain of salt, because the aforementioned IRS Section 25D guidance even comes right out and says “IRS guidance issued with respect to the energy credit under section 48 in publication items such as Notice 2018-59, has no applicability to the residential energy efficient property credit under section 25D,” but there might be reason to be optimistic that homeowners could claim the 30% ITC as long as they control and are liable for the generating asset—which could be even before the authority-having-jurisdiction has signed off.

      Of course, we are NOT tax experts nor do we give tax advice. So proceed at your own risk with ITC claims for residential solar systems not operating before January 1 of the year after the ITC steps down. The good news here is that cases like this are probably going to be a rarity, but we could see applications piling up ahead of the end of the year, meaning people might be waiting extra long for their utility to give the go-ahead during the last weeks of the year.

      1. Avatar for Phillip Billington Phillip Billington says:

        This is a tricky one, I have looked into this a lot and even read a few articles saying that if you purchase the equipment you will get the credit as long as the receipt is before 12/31/19. so with this being said I feel as if you get the system signed off by the governing city or county and your permit says that your system is ready to produce you should get your 30%. I just wish it was a lot more straight forward and they just explained exactly what the guidelines are.

  21. Avatar for Mel- Mel- says:

    Hi, my son-in-law wants to put in his own solar system. If he buys the parts for the system, can he apply for this tax credit on that purchase amount? Is there a stipulation that it has to be operational for the credit in 2019 just in case he doesn’t finish up before the end of the year?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Mel-

      Yep, you can buy parts from a place like Wholesale Solar out in California or the AltE Store on the east coast and claim the credit. The tax credit instructions say “costs are treated as being paid in the year the installation is complete,” and the IRS has issued guidance to the effect that to qualify for the full 30% credit, energy improvements must be “placed into service” before January 1, 2020. (Soruce:

      The best bet is to get the solar done before January 1, or take the 26% credit next year.

  22. Avatar for David Van Horn David Van Horn says:

    Hi, so if I elect not to take the tax credit as I am in a zero tax bracket and have been for the past 10 years, who gets it?

    1. Avatar for Ben Zientara Ben Zientara says:


      Unfortunately, it disappears if you don’t take it. In the commercial and industrial solar industry, there are currently ways for “tax equity partners” to invest in a solar installation and take the tax benefits even when other partners cannot. There is currently a bill in the U.S. House called the Renewable Energy Transferability Act that would simplify and expand this practice, potentially allowing for residential installations where the developer would take the ITC out of the final price.

      Ultimately, the best practice is to only install solar panels if you have the income to take the tax credit, or if other incentives make installing solar truly financially worthwhile. An alternative is to choose “third-party ownership” also known as a power purchase agreement (PPA), whereby you let the solar company install the panels and pay them for the electricity produced. PPAs result in the solar company taking the tax credit and other incentives, but can in some cases also save the homeowner money on their electric bills.

  23. Avatar for Maxwell Maxwell says:

    I received tax refund every year because I paid maximum tax on every paycheck.
    Will that 30% solar tax credit allow me to receive more refund beside my own income tax refund?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Maxwell-

      Thanks for the question. Whether you’ll receive more back in your refund if you install solar has only to do with how much tax you owe total in a year. Without looking at your tax returns, I couldn’t tell you the answer, but if your refunds up until this point have been smaller than the amount of taxes you had taken out of your checks throughout the year, there’s a good chance the solar tax credit will help you get a bigger refund.

      Definitely contact a professional tax adviser if you want to know how much of the solar tax credit you’ll be able to claim if you install solar this year.

      1. Avatar for Maxwell Maxwell says:


  24. Avatar for Cecilia Guerrero Cecilia Guerrero says:

    my husband and I are retired we don’t owe any taxes we get a small refund. we financed the solar system how are we going to get our rebate

    1. Avatar for Ben Zientara Ben Zientara says:


      Unfortunately, if you don’t have any income, you don’t owe any income taxes, and therefore can’t take the tax credit for solar. You’re still owed the credit, and you can claim it if you end up owing any taxes. You could try to work with a licensed tax adviser or estate planner and find ways to increase your income (something like taking early withdrawals from retirement accounts) in order to make it so you can claim the credits.

      Let me be clear that I can’t advise you to do anything of the sort, because I’m not a licensed financial adviser. Seeking professional guidance here is your best bet.

  25. Avatar for Tom Tom says:

    I’m in the process of buying a home where the solar power system was installed in April 2019, and I expect to close and take ownership of the house in August 2019, with nearly the full solar loan transferring to me as new owner. Who can claim the tax credit? The seller who contracted for the system and owned the home at time of installation? Me as the owner on Dec 31, 2019? The lienholder?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Tom-

      Unless you can work out something with the current owner and an attorney or two, I think the tax credit will accrue to the owner when the system was installed. It sounds like you’ll be taking on the payments for the system, so perhaps you can come to an agreement about that with the current owner.

  26. Avatar for Jeremy Jeremy says:

    If I own a property that is in a trust and my daughter lives in it, and no rent is being paid, is she allowed to file for the tax credit?

    1. Avatar for Ben Zientara Ben Zientara says:

      Jeremy- that’s an excellent question, and unfortunately, we can’t answer it. I’ve personally found the folks over at the Intuit (Turbo Tax) support forums to be very helpful when it comes to complicated questions regarding the tax credit.

  27. Avatar for Billy Billy says:

    Thanks for sharing all of this helpful info about the tax credit! Looking forward to learning more.

  28. Avatar for debby debby says:

    can you file for a tax credit on a second home that you only use for personal use

    1. Yes, you may providing you live in it 6 months out of the year.

  29. Avatar for Dave Dave says:

    Do you have to use the solar credit to pay off the solar installation loan?

    1. Avatar for Ben Zientara Ben Zientara says:


      In many cases, you do not, especially if you choose to use home equity or a personal loan to pay. In those cases, you amortize the loan over as many years as you and the bank agree on, and make the payments based on the principal.

      That means you can use the tax credit for whatever you’d like, and some people do. it also means your monthly payments will be higher than if you’d chosen to pay down the loan and re-amortize. The choice is up to you if you prefer a higher monthly payment and the tax credit in your pocket or the other way around.

  30. Avatar for Kevin Mcsorley Kevin Mcsorley says:

    Can you file for the federal tax credit witj more than one home if you live at both..

    1. Yes, as long as you live 6 months out of each one and the “second home” is not being used as a rental income where you’re filling a Schedule E on it.

  31. Avatar for B. Clark B. Clark says:

    I installed an $80k solar panel system for my house in 2018. I am in the process of doing my taxes. My solar tax credit allowed per form 5695 is the lesser of the 30% or my total tax liability. 30% of the $80k is $24k but my tax liability is $20k so I can carry $4k over to next year. I can also take the child tax credit of $2k except that when using the value on line 14 of the 5695 to input to my 1040 form, it then caps my total tax credits at my $20k tax liability. My question is can I voluntarily carry forward $6k into 2019 so that I can utilize my full 2018 child tax credit or do I have to max out the available maximum solar tax credit for this year?

  32. Avatar for E. Lomboy E. Lomboy says:

    My client installed a solar power system which was finally placed in service in 2018. There is a disagreement about final payment (of up to $200,000) Can taxpayer claim an additional solar credit for additional amount paid in 2019?

  33. Avatar for Dan Dan says:

    My contract and installation are for 2019, can I file my 2018 taxes using the credit? Or even refile my 2017 taxes to use the credit?

    1. Avatar for Ben Zientara Ben Zientara says:

      Unfortunately, if I understand your question correctly and your panels have either just been installed in 2019 or are still scheduled for install, you must claim the credit on your 2019 (or any subsequent year) tax form.

  34. Avatar for Glen Glen says:

    I was sold solar on the “promise” of the 30% tax credit. We zeroed out before the credit meaning it will ne carried over to 2019. That said. In my loan terms, if I do not apply the 30% to my loan within the first 18 months, my monthly payment will increase exponentially. Being that this credit is a NON refundable credit, how can my lender/ solar provider, change the terms of my loan without taking my income and or tax laibility into consideration?

    1. Avatar for Ben Zientara Ben Zientara says:


      That is a hard situation that your solar salesperson should have discussed with you. The loan balloon payment is a way to keep your overall monthly payment low while (ideally) leveraging your ability to take the tax credit to make that big payment. If you can’t take the credit, then you can’t make the payment. Some loan providers allow for this scenario by simply allowing you to make a smaller payment, rolling the balance back into your monthly payments.

      If you think you’ll be able to take the full solar tax credit next year, it might be best to accept the higher monthly payments now, make an extra payment toward the loan when you can, and satisfy yourself with the thought that your solar loan will be paid back that much sooner. You could also try to make the large payment next year and ask the loan provider to re-amortize your loan, but that typically involves a fee, which might not be a good idea for you, financially speaking.

      I’m sorry your solar salesperson and loan provider didn’t clearly explain the non-refundability of the tax credit to you up front. We try to combat misleading or just bad communication here, and I hope the options I’ve laid out give you some sense of your options. Good luck, and please don’t hesitate to reach out if we can help in any other way.

  35. Avatar for Linda Linda says:

    Should my deduction include state(OH) taxes paid on the solar panel purchase (I doubt it, but had to ask!)?

  36. Avatar for Betzy Betzy says:

    Which date I have use the installation date or the contract date? Because I singed the contract on September 2018 but they installed the panels on January 2019. Thanks in advance!!

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Betzy-

      The instructions for the tax credit say that costs are considered to be paid when installation is complete. Hope that helps, even though it’s probably not what you wanted to hear!


  37. Avatar for Anonymous Anonymous says:


    1. Avatar for Ben Zientara Ben Zientara says:

      If your daughter owns and lives in your home, she can. Otherwise, it’s unlikely there’s a way for her to claim the solar tax credit.

  38. Avatar for Ben Ben says:

    I live in a home with my daughter. we are both on the title and split paying the electric bill. The cost of our system installed in 2018 was 51,250. We both federal taxes as single. Can we both file the 5695 for 1/2 the cost of the system? We also live in NY that has a State Tax credit for 25% of the cost of the system with a cap of $ 5,000. Can we also file 2 IT 255’s to each claim the state tax credit.

    1. Avatar for Ben Zientara Ben Zientara says:


      This is a very good question, and we don’t have an easy answer. One of the best places I’ve found to ask these kinds of tax questions is the Intuit (TurboTax) forums. While it doesn’t explicitly answer your question, it does seem that there is a provision for Joint Allocation in the Form 5695 section of the Turbo Tax Application, per this forum post:

      Of course, I always say your best bet is to ask a professional, licensed tax preparer for their understanding.

  39. Avatar for Joey Joey says:

    We own a home that our disabled daughter lives in with paid caretakers. She receives SSA but we pay for all her care. The utilities are in my name. This is not a rental. Our daughter is a dependant on our taxes. Can we get solar and get the 30% rebate?

    1. Avatar for Ben Zientara Ben Zientara says:


      This is a very good question, and while we can provide you with a 100% water-tight answer, the instructions for form 5695 seem to offer some guidance:

      First, under the heading of “home,” the IRS writes: “A home is where you lived in 2017 and can include a house, houseboat, mobile home, cooperative apartment,condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.”

      Next, under the heading “Qualified solar electric property costs,” they write: “The home doesn’t have to be your main home.”

      The question at the heart of this issue is “does a home you own occupied by your dependent qualify as your home?” And I’m afraid we can’t answer that. But I think you definitely have strong reason to speak with a licensed tax professional in your area.

      Good luck!

  40. Avatar for Steve Steve says:

    What defines an installation’s completion date in the context of applying for the tax credit? The last date that the crew work on the installation? The date that the installation passes utility company’s inspection (PG&E in my case)? The date that PG&E grant me the permission to operate? Or other date? I am asking because for me, these dates happen in different years (2018 for first two dates, 2019 for the last date). Thanks!

    1. Avatar for Ben Zientara Ben Zientara says:


      This tax stuff sure is complicated, huh? You’re absolutely right that the wording of the instructions of form 5695 could be more clear. But in the absence of further clarification, solar installers seems to agree that once “the system is capable of running but not necessarily licensed or inspected—”according to a pro at solar panel talk—and before any utility company inspection, installation is considered complete.

      Basically, if the final electrical inspection is performed and you’ve paid the bill, you’re just waiting for permission to operate to work through PG&E’s bureaucracy (which is not under your control). For all intents and purposes, your system’s construction is complete.

      The usual caveats apply. We’re not tax professionals, and we’re not authorized to give any tax advice. It’s best to check with a licensed professional before proceeding.

  41. Avatar for P.B P.B says:

    I have signed up agreement in with contractor in December 2018 and start process however actual solar sytem installed in early January 2019. Can I claim tax credit on my 2018 tax return as process already started Or need to wait until 2019 tax return?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey P.B.

      Unfortunately, you need to wait until you file taxes for 2019. Costs are treated as though they were paid during the year that the installation is finished, not before. But look forward to that big credit all year!

  42. Avatar for Mariola Hall Mariola Hall says:

    I have a house in TN which is my full time residence ,building new house in HI and installing solar system $25,000 on that house which we are using as vacation place ,can I claim 30% tax credit on my return ,even that is not my main residence ,also since I am not filing HI state tax ,how can I claim $5,000 credit for Hi state taxes

  43. Avatar for Craig Craig says:

    We installed 81 panels at our house in 2017 and took the 30% tax, can we get the tax break on installing battery panels (Tesla’s) in 2019?

  44. Avatar for Michelle Michelle says:

    May I please get clarification as I am seeing different and misleading info on the internet. Scenario: We bought a $20,000 solar system so our ITC (30%) would be $6,000. if we have say a $10,000 tax liability and we are a W2 employee and paid in $11,000 toward our Federal taxes last year so we are now getting back $1000, would we instead get $7,000 back ($6,000 +$1,000) or are we not eligible and only getting $1,000?? Thank you

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, Michelle. Thanks for writing!

      If your tax liability is $10,000, you paid in $11,000, and you’re owed a solar tax credit of $6,000, you should get $7,000 back. The ITC cannot exceed your tax liability, and only offsets Federal income tax, not social security or medicare tax (aka FICA tax).

      Hope that helps, Michelle!

  45. Avatar for Nicole Nicole says:

    If I initiated the solar loan in 2018 and they were installed in 2018, but not inspected or turned on until 2019, can I still apply for the 30% federal tax credit for 2018?

  46. Avatar for Richard Heck Richard Heck says:

    I received my tax credit for a complete off grid solar system in2012, I need new batteries now and want to upgrade to nickel iron or lithium iron batteries. Can I get a 30% tax credit, the old batteries are almost shot.

  47. Avatar for Courtney Corda Courtney Corda says:

    Hi Ben, First off, thanks for a great FAQ column about the ITC. Regarding your answer to J. Dudek on 02/16/2016 about whether the ITC can apply to residential rental properties owned by his LLC. You said that “the solar tax credit does not apply to rental properties. It’s a sad situation, indeed, because great landlords like you could be a great source for capital for solar installations.” But couldn’t Dudek’s LLC qualify for the business ITC? There is a discussion of this here: Or do I have this wrong? Of course, this only make business sense for the LLC if the tenants rent includes utilities (electricity). Courtney Corda, Corda Solar, Danville, CA

    1. Avatar for Ben Zientara Ben Zientara says:

      Thanks, Courtney!

      You’re absolutely right that the rental property owner could claim the business ITC, and you’re also right that installing solar for your residents can be a great selling point, especially since the long-term price of energy from solar is in many cases cheaper than what the utility company charges! The landlord could price that in to their rental price and even come out ahead considering the difference in the levelized cost of energy vs. retail utility prices.


  48. Avatar for Amy Amy says:

    If we initiate our loan for solar panels in 2018, but do not have them installed until 2019, will the tax credit be applied in 2019? We are purchasing a PHEV in 2018 and want that to apply first. If we can only apply the solar credit for two years, will that be 2018/2019 or 2019/2020?

    1. Avatar for Ben Zientara Ben Zientara says:


      Solar costs are treated as paid when installation is complete. If you are purchasing a PHEV in 2018, you can take that credit on your 2018 taxes filed before April 15th of 2019. When the solar installation is complete, you’ll be able to take the solar tax credit on your 2019 taxes, filed before April 15th, 2020.

  49. Avatar for reno reno says:

    i am getting solar power as soon as my meter is changed. can i apply for the rebate if i do not have any income. or can my daughter who lives in another state claim it. she is co=owner of my home

  50. Avatar for Dave Dave says:

    Thanks for that Ben! So quick question, what is your opinion of what is meant when the code says “the item”? Do you think it means the whole project, or just the “items” that are being claimed? I have installed everything that I have purchased thus far, but that’s only half of what is needed to begin producing solar power. Thx!

  51. Avatar for Dave Dave says:

    I have purchased and installed a hybrid inverter and batteries in 2018 and plan to purchase and install the solar panels and charge controllers in 2019. I think that the work I have already completed may satisfy the “physical work test” (qualifying as start of construction) mentioned in section 4 of this document. However, I’m not sure if this document applies to residential installations like mine, or only commercial installations. My question is whether I can claim my 2018 costs for the project on my 2018 taxes and then claim my 2019 costs for the project on my 2019 taxes?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, Dave, and thanks for your question!

      As far as we know, the “physical work test” applies only to commercial installations. It was designed to spur development of new solar projects that could “get shovels in the ground” before the expiration of the tax credit.

      See our response to Ashley below, in which we quote the instructions for Form 5695, which say “costs (for a home solar installation) are treated as being paid when the original installation of the item is completed.” Unfortunately, that means you can only claim the credit—based on the total cost paid during any year—in the year when the installation is complete.

  52. Avatar for Talita Talita says:

    How many times can I claim the 30% tax credit? For example, suppose that I already claimed the tax credit for a new solar system. Now I want to upgrade the system adding more panels, can I claim the tax credit again on this upgrade? Thanks!

  53. Avatar for Curtis Curtis says:

    Our HOA is considering buying a solar system to mitigate the $7,000/month they pay for the common areas. I have read that the HA can make the 30%tax credit available to the individual homeowners, but the HOA’S CPA does not agree. How can I change the CPA’s mind?

    1. Avatar for Ben Zientara Ben Zientara says:


      It is unlikely the HOA can take the individual solar investment tax credit (ITC) like a homeowner can. Instead, it is more likely that the HOA qualifies for the business ITC, depending on how it’s structured.

      Have the CPA reach out to a tax professional for guidance on this. Many businesses, including LLCs, S-Corps, and more have taken the business solar tax credit for exactly this purpose.

      Good luck, and let me know what you find!

  54. Avatar for Anonymous Anonymous says:

    My husband and I will most likely be required to pay some capital gains tax on the sale of a home this year. if we install solar in our primary residence, aside from the NYS tax credit, and the federal 30% credit will the remaining cost of the system offset some of the cap gain?

  55. Avatar for Emily Emily says:

    We have just installed a solar pv system which will qualify for an ITC of around $8k. We want to purchase an EV to make use of all that nice sunpower, but we won’t have enough tax to offset both the ITC and the EV credits in one year. I know the ITC may be rolled forward until it is used up and the EV credit must be used in the year the EV is purchased or we will lose it. My question is this: does the IRS require that the ITC be used before the EV credit, or will we be able to use the EV credit this year and roll the entire ITC forward? Thanks.

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Emily-

      This is a very complicated issue with a (fortunately) easy answer. When I first encountered it, it took me some time and help from experts to figure it out! You can claim both credits, and if you have at least $7,500 in tax liability, you’ll get the EV credit first and only receive the portion of the solar tax credit up to the rest of your tax liability. Then you can carry forward the solar tax credit into future years—as many as it takes to claim your full credit.

      I’ll try to boil it down as simply as possible why this is:

      • You use form 8936 to claim the EV tax credit. Here’s a helpful link about claiming the EV tax credit.
      • You use form 5695 to file the solar tax credit. You calculate the amount of the credit you can take this year on line 14, using a worksheet in the Instructions for form 5695. Line 9 of that worksheet instructs you to insert the amount of any credit from From 8695. Essentially, you reduce the available solar tax credit by other tax credits you can claim before it, including the EV tax credit.

      That’s it! Hope that helps.


  56. Avatar for Sal Sal says:

    We own a small family farm that is our primary residence. We were advised to put it into an LLC for liability reasons my wife and I are the only two principals of the LLC. Do we qualify for the Federal tax credit?

    1. Avatar for Ben Zientara Ben Zientara says:


      I don’t believe you’d be able to claim the ITC for homeowners, but as the farm is commercial property of the LLC, you should qualify for the Business Energy ITC, which is basically the same as the personal ITC, except I believe it offers a direct rebate of 30% of the costs to install the system, provided the installation meets some basic requirements. It is essential you speak to a tax expert before going forward with claiming the credit, as you’ll need guidance on exactly how to claim the credit and hew to the rules.

      Best of luck!

  57. Avatar for Tony M Tony M says:

    Should I change my tax dependency to 0 to get more money back when claiming my solar credit?

  58. Avatar for Darvey Darvey says:

    My brothers and sisters and I owe a residence in Maine. It is not the primary residence for any of us. It is not on any energy grid. We currently use a generator for all our power needs. WE are about to install a Solar powered system that will cost about 20K. Can we take the 30% tax credit?

  59. Avatar for ken ken says:

    a new roof on new building or a roof replacement before installing a roof top solar system be able to get the ITC on that cost?

  60. Avatar for Anonymous Anonymous says:

    My wife and I are totally dependent upon my daughter and son-in-law for our sebnior care senior care (we are 88 and 82 respectively). We have income from the sale of our home and would like to put solar on my daughter’s house. Can we or can they take the tax credi?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, Anon-

      The credit is explicitly available to homeowners who install “qualifying solar equipment” on their primary residence. So unless you own the home, you can’t claim the credit. If you intend to pay for the solar installation, you’d have to contact a tax accountant or lawyer to see whether the amount you pay would need to be considered a gift, for tax purposes, before filing.

  61. Avatar for Carl Brack Carl Brack says:

    I’ve took the solar tax credit last year for solar panels. I would now like to add a battery. Can I get credit for the battery or is it only at time of installation?

    1. Avatar for Ben Zientara Ben Zientara says:

      Excellent question, Carl! You should know that a couple did exactly what you propose last year, and the IRS issued special guidance based on their case.

      It seems that as long as you set up your battery to charge only from your solar panels, you can claim the ITC for it. Of course, speak to a professional before final installation to be sure, but based on what the IRS says, you should be good!

  62. Avatar for Don Don says:

    We purchased solar panels over 10 years ago and never took a tax credit, I don’t believe it was available. Recently we needed significant wiring repairs due to squirrels. Can we claim the 30% tax credit for the repairs?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey Don- That’s a tough question, and we don’t know the answer. There’s a comment on an answer to a question asked on the Intuit website that reads, in part, “basic repairs to keep your installed property in working order are never eligible for credits or deductions including the energy credit.”

      Unfortunately, that doesn’t qualify as expert advice. I recommend speaking with a tax specialist on this one.

  63. Avatar for Paula Paula says:

    Question: We are buying a home with leased solar panels on it already. If we chose to buy the solar panels from the leasing company would we get the tax credit? Or does it not count because they were already installed as part of the lease? Thanks!

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Paula-

      I don’t believe you’d get the tax credit, as the installation company almost certainly claimed it for themselves at the time of installation. You might talk to a tax attorney or accountant about depreciation of the asset after you purchase, but the credit will not be possible.

      You could continue making the lease payments if the solar installer will transfer the lease to you; it would be smart as long as the system generates at least as much electricity as it takes to offset the lease payment. You wouldn’t be saving any money per month compared to a regular electricity bill, but then again, you wouldn’t be making a big up-front payment for the system, either, leaving more cash in your pocket now for other things.

  64. Avatar for Ken Ken says:

    I have gone solar with my old house 2 years ago, recently moved into a new house and would like to go solar again, can I still claim the ITC? or it is just a 1 time thing?

    1. Avatar for Ben Zientara Ben Zientara says:


      As long as the new place is your primary residence, you can claim the ITC!

  65. Avatar for Linda Linda says:

    My husband and I are retired and do not usually pay federal income tax, but may have some state tax to pay. Does this tax credit apply to state or just federal tax? Also, I am not clear on whether we would have to claim the entire credit in the first two years, or would we have ten years to use it up?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, Linda-

      The tax credit described in this post only applies to federal income taxes. You have as many years as necessary to claim the full 30% of solar installation costs, but from a return-on-investment standpoint, it’s better to get it all back as soon as you can.

      One strategy might be to take a larger disbursement than usual from any retirement accounts you draw from, and use that money to pay for solar panels. That would increase your income enough to make taking the credit possible, and it might mean you don’t pay any additional taxes. Again, though, as we’ve mentioned countless times, we’re not tax experts, and we can’t legally give financial planning advice, so it’s best to speak with an attorney, accountant, or other tax expert.

      Best of luck!

  66. Avatar for Mkus Mkus says:

    How is the solar tax credit calculated in combination with other tax credit? Do you first calculate the other credits, then the solar tax credit to cover any liability still left, and the rest rolls over to next year? Or do you first utilize the solar tax credit fully?

    1. Avatar for Ben Zientara Ben Zientara says:

      The former. The Solar Investment Tax Credit (ITC) is not a “fully refundable” tax credit, meaning you must take other, fully refundable tax credits, like the earned-income and child tax credits first, then apply the ITC to what remains, and carry over the balance until the next tax year.

  67. Avatar for Brendan C Brendan C says:

    Our understanding is any costs in the preparation and installation of a solar system are covered. A new roof? Yes. Tree services? Potentially, provided that this is not part of general maintenance for the residence, and is done solely to prepare for installation. Check with a tax professional before undertaking any major work.

  68. Avatar for Brendan C Brendan C says:

    Depending on your state, you may be eligible for the tax credit with your rented mobile home, but this may involve registering as a rental company LLC and taking a business credit. A tax professional can walk you through this and even set you up as an LLC.

  69. Avatar for Anonymous Anonymous says:

    I own my mobile home but rent the property. Do I qualify

  70. Avatar for Heather Heather says:

    I always get money back on my taxes, will I get more money back or will it just reduce my income. It seems it’s only beneficial when you owe money in taxes.

  71. Avatar for FJ FJ says:

    If my tax liability is much less than the value of the 30% tax credit, how many years do I have to recoup the credit?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hey FJ-

      You can take the credit over as many years as necessary, but obviously it pays to get that money back as soon as you can.

  72. Avatar for Joel Joel says:

    I installed a solar system on my home about 4 years ago and claimed the 30% tax credit. I also have a granny flat where my in laws live, all in the same property. Can I claim the tax credit this year if i install a solar system

  73. Avatar for Peter Robinson Peter Robinson says:

    Does reroofing and tree trimming to prepare for solar installation qualify for tax credits?

    1. Avatar for Ben Zientara Ben Zientara says:

      Unfortunately, I don’t believe it does. Certainly re-roofing is not covered, as we understand it. But if your solar installer is the one doing the tree-trimming, and they bill you for it as part of the installation, it might be. You might want to contact a tax attorney to see whether you can write that work off.

  74. Avatar for Tom Tom says:

    Are you able to claim the solar credit more than once?

  75. Avatar for Grant Grant says:

    I live in Florida. In 2016 I took advantage of both the Federal & Utility rebates for my Domestic hot water system. Now I am interested in adding on solar electicity to the same residence. Can I claim the same incentives again in 2018 for a completely separate system?

    1. Avatar for Ben Zientara Ben Zientara says:

      Good question, Grant. If you install a new solar electric system on your home this year, you can absolutely claim the federal solar tax credit of 30%.

  76. Avatar for Tom Tom says:

    If I pay for the instalation of a solar system at my Mom’s house as part of a community solar deal, can I take the 30% tax credit off my taxes or does she have to own the system since it’s at her house?

  77. Avatar for Jan Jan says:

    Can the tax credit apply to second home or only for primary residence?

  78. Avatar for J Roybal J Roybal says:

    Does my solar purchase need to be paid in full before I can get the tax credit

    1. Avatar for Ben Zientara Ben Zientara says:

      Nope! Solar purchases made with a loan are considered as “paid for” for the purposes of taking the tax credit. It’s what makes solar loans the smartest choice for going solar.

  79. Avatar for Russ Russ says:

    My wife and i are both retired and as such, neither one of us has an “employment” tax that will ever become due. We are however, involved in the stock market and pay a capital gains tax. Are we able to apply the 30% credit towards the tax we owe due to capital gains? Thanks

    1. Avatar for Ben Zientara Ben Zientara says:


      Form 1040 has you report Capital Gain distributions on line 13, in the income section, which is carried down to line 22 as part of your total income. The credit from installing solar can directly reduce all taxes from line 22. So it looks like you’re good! Of course, talk to a tax professional before acting on this advice. And have a sunny day!

  80. Avatar for Mark Mark says:

    My partner and I are Joint Tenants in Common on our home and are considering buying rooftop solar. I have almost no tax liability to use the credit but her tax liability is significant. Can the deduction be taken in larger part (or in total) by the party with the greater liability?

  81. Avatar for Anna Anna says:

    I agree with P. Moon. Retirees living on social security or otherwise not paying much in federal taxes are being denied the option of installing solar panels. There’s a huge market out there if you include retired people. Solar companies AND retirees are losing out. Why not make the federal rebate available as a normal rebate on costs, not only a tax credit?

  82. Avatar for Anonymous Anonymous says:

    If I donate the solar equipment 2 years after purchase and taking credit ?

  83. Avatar for Alexander Asante Alexander Asante says:

    What if I buy a hybrid system with solar, wind and a diesel generator included? Do I qualify for a tax credit on the entire cost of the system or only on the cost of the solar panels

  84. Avatar for Anonymous Anonymous says:

    Is my tax credit from my solar purchase taxable income the fo

  85. Avatar for Anonymous Anonymous says:

    I received a tax credit from my 5695 form,hat money went directly to solar company tha

  86. Avatar for Carla Carla says:

    Hi, an arquitect already evalue my home and i will be buying solar panels in the next couple of months. Is the 30%tax credit issued as a check to you after the purchase once you file your tax return or its only a credit to your taxes? i work under an employer and pay more than enough taxes through the year. will i received a check (or probably a payment for two years) with the refund or just a tax credit (which i will not need)? . Thank you for your help

  87. Avatar for Greg Greg says:

    I had solar panels installed, they were purchased, the home is in a family trust, I was told that Trust would qualify for the 30 percent tax credit,is that true.

  88. Avatar for Greg Greg says:

    My roof only had a life of five years, I replaced it and put solar panels in, can I get the full tax credit on the new roof and solar instalation

  89. Avatar for Ellen Ellen says:

    I have a stand alone PV system. This year we added a propane generator for back up. Are those costs deductible?

  90. Avatar for Tyler Tyler says:

    Ok, so I just spoke (yesterday) to a company about installing solar panels on my house. This year I owe the IRS $1400 and I expect it to be about the same next year. They said with the system I’m installing I could get a credit of about $13,500. So let’s say I take out the $1500 or so I would owe the IRS next year that would leave about $12,000 in credits. Would I get that $12,000 back as a refund? I’m already claiming 9 dependents so I don’t think I can really lessen my tax burden much more than I already have.

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Tyler-

      Sadly, the ITC is not a fully-refundable tax credit, which means it can only offset taxes you actually owe. But you can take the credit for as many years as necessary to recoup the full amount. So if you expect to owe just $1,400 per year after all other deductions and your total ITC should be $13,500, you can expect to take 10 years to claim the full credit. Presumably some of those 9 dependents will age out of being dependents some time in the next 10 years, so your owed tax may go up and allow you to claim a larger portion of the credit.

      Hope that helps,

  91. Avatar for carol carol says:

    question do you know how it works for a married coup;e filing seaparetely

  92. Avatar for Aida Aida says:

    Considering getting panel. I usually never own taxes because I withhold money so I don’t owe with the 30% tX credit I know it’s a refund but I’m being told I would get tht money back since I already paid it through out the year in my With holdings. Is thAt correct ?

    1. Avatar for Ben Zientara Ben Zientara says:

      Yes, that is correct.

  93. Avatar for James James says:

    I recently got solar panels at the end of summer 2016, they were financed (about $30,000) with no payments due for the first year. So we have yet to actually pay anything toward them. Upon doing my taxes this year we were told that we couldn’t take the 30% tax break for that amount because they were finance and we havn’t actually paid for them. Is this true or are we able to go ahead and apply for the tax credit for the full amount finance.

  94. Avatar for Ashley Ashley says:

    How is the year for the tax credit determined? By the date of final payment, the date of the installation, or the date of Permission to Operate (PTO)? Thanks!

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi Ashley-

      We answer that question on another page about the tax credit (gee, maybe we should combine them?).

      Anyway, here’s the answer:

      The instructions for Form 5695 say “Costs are treated as being paid when the original installation of the item is completed,” so you can claim all the costs for your installation no matter when they were paid, but you have to wait to claim them in the year the installation takes place. Keep receipts!

      Hope that helps, thanks!

  95. Avatar for W.Q.Henderson W.Q.Henderson says:

    Early this coming year (2017) I intend to install a small solar system in order to electrify my 4-car garage which contains a large hobby work space. If the system works as expected, I intend to enlarge the system in order to electrify my 2000sq/ft residece. How doew the federal & state tax rebaate system deal with a two step instalation?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, W.Q.

      You can claim the ITC for your first installation as long as that garage is on the same property as your primary residence. Then, when you’re ready, you can claim a second ITC credit if you add to the installation later. Any time you spend money on a renewable energy project for your home, the ITC applies. Talk to a tax professional to be sure, but that’s the gist of it.

  96. Avatar for Jasper wilson Jasper wilson says:

    I am in the #9 category I don’t file income taxes I want to no if someone can take the tax credit for me and give it to me to pay on solar panels

    1. Avatar for Ben Zientara Ben Zientara says:

      I wish it were possible, Jasper. Big companies like SolarCity do this all the time, trading their tax credit for installing solar to companies with hug tax burdens. Sadly, individuals cannot do that at all. Ain’t the tax code grand?

  97. Avatar for Christian Munz Christian Munz says:

    I can’t find anywhere that states that I am not allowed to claim a new barn as the structure for my solar array and receive a 30% tax credit on the construction cost of said barn. I am pretty sure this is unallowable, but where can I find that documented on an official site? Or, is it allowable?

  98. Avatar for Phillip Swan Phillip Swan says:

    Norwich would this cost for my home

  99. Avatar for Paul mooney Paul mooney says:

    If I install a TPO roof in conjunction with the installation of a solar system, can I take an additional 30 % ITC on the cost of the roof?

  100. Avatar for Lessell Lessell says:

    Yes, I will save about 25-45 $ each month if I apply all my tax refund of $8,000 towards my balance of my solar being financed. I just couldn’t find the information anywhere on the internet or Solar websites stating that my solar refund could be applied towards my loan balance a year later.

    1. Avatar for Ben Zientara Ben Zientara says:

      That’s great, Lessell! Probably the reason they say “a year later” is they assume you’ll install solar the spring or summer of one year and then wait until April to get your tax credit. For the financial estimates we do, we calculate a “Year one” price, which is the purchase price minus rebates, energy savings, and the tax credit.

      Anyway, looks like you’ll be saving money even while paying down your loan, which basically means an infinite return on your investment. Good job!

  101. Avatar for jackson jackson says:

    I was informed by a solar company that I can apply my tax credit to pay down my loan for the solar system – is this true?

    1. Avatar for Ben Zientara Ben Zientara says:

      It is! Whatever you get as a tax credit this year, as long as it comes to you as a refund check, should be able to be applied to the principle of your loan. That won’t reduce your monthly payment unless you refinance, but it makes paying off the loan go much quicker, meaning you’re closer to breaking even and making those sweet solar bucks! Paying the loan off early also increases the rate of return on your investment in solar.

      Is your monthly loan payment more or less than the money you’ll be saving with solar?

  102. Avatar for Sara Sara says:

    Are you able to get the tax credit if you purchase the solar panels from Costco and install them yourself?

  103. Avatar for Mel G Mel G says:

    Does the 30% tax credit apply to solar leases?

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi, Mel! The solar tax credit does not apply to leases. Actually, the leasing company gets the tax credit, which is why leasing is so affordable.


  104. Avatar for Lynne Lynne says:

    Is there any way to either work out an agreement with an installer or another person to get the Federal Tax Credit if you you do not pay taxes because you are disabled? Is there any push at all to allow seniors, the disabled and others who do not pay Federal tax to get a rebate? After all, these are the people who would benefit the most in the savings and they don’t seem to be able to take advantage of the Federal Program. Does anyone care enough to advocate for this? There are many people who own homes that no longer have to pay these taxes since they are on Social Security. Who could I contact concerning this?

  105. Avatar for J. Dudek J. Dudek says:

    Does the 30% Federal Solar Tax Credit apply to residential rental properties? I am considering putting solar on all of my rental properties but I am unclear on whether I would qualify for the credit because they are not my primary residence. My LLC owns them.

    1. Avatar for Ben Zientara Ben Zientara says:

      Hi there! Unfortunately, the solar tax credit does not apply to rental properties. It’s a sad situation, indeed, because great landlords like you could be a great source for capital for solar installations.

  106. Avatar for V. Williams V. Williams says:

    Can you take the 30% credit anytime within 5 years after the installation?

    1. Avatar for Ben Zientara Ben Zientara says:

      Nope, only for two years following installation.

  107. Avatar for P. Moon P. Moon says:

    Why are solar companies NOT required to tell customers the limitations of the solar tax credit? They aren’t telling retired people, that are no longer paying taxes that they won’t receive their ITC and low income people that they will receive a small portion of their ITC. They are also not being told they can only roll over remaining credits until the next tax year, so they will likely loose thousands. .

Have anything to add?

Your email address will not be published.

Subscribe to get solar news

The Federal Solar Tax Credit Has Stepped Down. It Steps Down Again In:

Learn more about the Federal Solar Tax Credit before it goes away.

Solar Power Rocks is a Wave Solar company

Wave Solar Logo