Renewable Energy Tax Credit

The following is provided as information only – not as tax advice.  Please consult a tax professional.

  • Applies to both residential and business
  • Credit applied to taxes owed in the amount of 30% of the net cost of solar installation
  • Installation costs include the system, labor, fees, batteries, taxes and certain remediation costs to enable installation of the system, e.g. main electric main panel upgrade, roof repairs, or cool roof installation (please consult tax professional)
  • Any installer, utility, state, or other incentives need to be deducted to arrive at the net cost
  • 30% credit level for systems on which construction has begun before end of 2019; 26% in 2020; 22% in 2021; 10% in 2022; residential credit eliminated and 10% for commercial in and after 2023
  • This is a credit – not a deduction; therefore, it is worth dollar for dollar
  • The credit is not considered income so you do no owe tax on it
  • You need to owe at least the same amount of tax to take advantage of it and can carry over to subsequent years
  • If you are the primary owner for multiple homes, then credit needs to be pro-rated for each home based on the amount of time you live in each home
  • There is no limit to the credit
  • Claim credit by completing IRS forms 1040 and 5695 (please consult tax professional)