Federal Investment Tax Credit (ITC)
Federal Investment Tax Credit (ITC)
Tax CreditThe federal solar Investment Tax Credit (ITC) lets you deduct 30% of the cost of installing a solar energy system from your federal taxes. The credit applies to both residential and commercial systems, and there is no cap on its value.
Rate / Amount
30% of system cost
Valid Through
2032
Example
A $20,000 solar system qualifies for a $6,000 federal tax credit, reducing your net cost to $14,000.
How It Works
When you install a solar panel system, you can claim 30% of the total installation cost as a credit on your federal income tax return. Unlike a deduction, a tax credit reduces what you owe dollar-for-dollar. If the credit exceeds your tax liability in year one, the remaining credit can roll over to subsequent tax years.
Eligibility
US homeowners who own (not lease) a solar system installed on their primary or secondary residence. Must have federal tax liability to use the credit.
Real-World Example
A $20,000 solar system qualifies for a $6,000 federal tax credit, reducing your net cost to $14,000.