Federal Solar Tax Credit (ITC)
A dollar-for-dollar reduction in federal income taxes equal to 30% of the total installed cost of a residential solar system (through 2032). Steps down to 26% in 2033 and 22% in 2034.
Why It Matters
The ITC is the single largest solar incentive. On a $25,000 system, it saves $7,500. You must have sufficient tax liability to claim it (or carry it forward).
Related Tools
Related Terms
Federal Tax Credit (ITC)
Investment Tax Credit allowing homeowners to deduct a percentage of solar installation costs from federal taxes. Currently 30% through 2032.
Tax Credit Carryforward
When a tax credit exceeds your tax liability in a given year, the unused portion can be carried forward and applied to future tax years. The 25D clean energy credit allows unlimited carryforward.
25D Tax Credit
The federal Residential Clean Energy Credit (IRC §25D) providing 30% of the cost of solar panels, battery storage, and other clean energy systems installed on a residence through 2032.