Inflation Reduction Act: Solar Tax Credit
Save money when upgrading to an energy-efficient solar array with a tax credit from the federal government.
Rebate Overview
Overview
The Inflation Reduction Act: Solar Tax Credit is a tax credit that allows homeowners to deduct 30% of the cost of installing solar panels and battery backup systems of 3 kWh or more from their federal taxes. This incentive is available for installations completed before December 31, 2025. Upgrades completed before the cutoff can be claimed as a credit using Form 5695 on 2025 tax returns, filed in early 2026.
Benefits
Installing solar panels and battery backup systems can make your home more energy-efficient and reduce your electricity bills. It also helps the environment by decreasing reliance on fossil fuels and lowering greenhouse gas emissions. Plus, it can increase your home's value and appeal to future buyers.
More Information
- To qualify, the solar panel system must be installed and placed in service by December 31, 2025.
- The tax credit applies to both the purchase and installation costs of solar panels and battery backup systems with a capacity of 3 kWh or more.
- Homeowners must own their solar system; leasing or signing a power purchase agreement disqualifies you from claiming the credit.
- If you owe less than the credit amount in federal taxes for the year of installation, you can carry over the unused portion to future tax years.
- To claim the credit, file IRS Form 5695 with your federal tax return (Form 1040 or Form 1040NR).
Details
- Expiration date: December 31, 2025
- Incentive type: Tax Credit
- Maximum Percent: 30%
- Category: Solar Array
- Link: More details
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QuitCarbon's free, expert guidance makes it simple and affordable to get fossil fuels out of our homes. We've helped thousands of homeowners with planning, installation, and rebates on upgrades like heat pumps, mini-splits, induction cooking, and EV chargers.
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