Federal Residential Clean Energy Credit (Solar Tax Credit)
- Credit Amount: Homeowners can claim 30% of the total cost of installing a qualified solar energy system, including equipment and installation expenses, on their federal income tax returns. This credit applies to systems installed from 2022 through 2032.
- Phased Reduction: After 2032, the credit gradually decreases to 26% in 2033, then 22% in 2034, and it expires entirely after 2034.
- Eligibility: The credit applies to new solar installations on a primary or secondary U.S. residence, including houses, mobile homes, condominiums, and houseboats. The system must be purchased (not leased) and generate electricity or heat water.
- Covered Costs: It covers the cost of solar panels, equipment, installation, and sometimes solar power storage equipment. However, costs related solely to structural support for the panels generally do not qualify.
- Claiming the Credit: Taxpayers must file IRS Form 5695 to claim the credit when filing their tax returns.
- Combining Incentives: The federal credit can often be combined with state incentives and utility rebates, although receiving other incentives might reduce the credit amount.
Summary Table
| Feature | Details |
|---|---|
| Credit percentage | 30% (2022–2032), 26% (2033), 22% (2034) |
| Eligible property types | Primary/secondary homes, mobile homes, condos, houseboats |
| Covered costs | Equipment, installation, solar power storage |
| Non-covered costs | Structural work solely for panel support |
| Credit expiration | After 2034 |
| Required tax form | IRS Form 5695 |
This federal incentive is the primary and most significant tax benefit available for residential solar installations, designed to encourage investment in clean energy technologies by reducing upfront costs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-tax-incentives-for-residential-solar-panels/
