Federal Tax Credit (ITC)
Investment Tax Credit allowing homeowners to deduct a percentage of solar installation costs from federal taxes. Currently 30% through 2032.
Why It Matters
The ITC is the largest single incentive for going solar. On a $25,000 system it saves $7,500 in taxes, making it the difference between a 10-year and 7-year payback for many homeowners.
Real-World Example
Related Tools
Related Terms
SREC (Solar Renewable Energy Certificate)
A tradable certificate representing the environmental benefits of generating 1 MWh of solar electricity. Can be sold for additional income in some states.
Payback Period
The time it takes for your cumulative savings to equal your initial investment in solar. Typically 6-10 years in the US.
ROI (Return on Investment)
The financial gain from solar expressed as a percentage of the initial cost. Most residential solar has 10-20% ROI.