The following is provided as information only – not as tax advice. Please consult a tax professional.
When you install a solar power system, the federal government rewards you with a tax credit for investing in solar energy, which includes panel upgrade, roof repairs, or cool roof installation.
- Credit applied to taxes owed in the amount of 30% of the net cost of solar installation,
- Installation costs include the system, labor, fees, taxes and certain corrective costs to enable installation of the system,
- 30% credit level for systems on which construction has begun before the end of 2019; 26% in 2020; 22% in 2021; 10% in 2022; residential credit eliminated and 10% for commercial in and after 2023.
The credit steps down in value over the next few years, until it disappears completely for residential customers in 2022.
- This is a credit – not a deduction; therefore, it is worth dollar for dollar
- The credit is not considered as income, so you do not owe tax on it
- 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)
A simple and quick check with a free estimate on any home improvement project, check if you qualify here.