Solar Energy Systems Tax Credit
The following Residential Clean Energy Tax Credit amounts apply for the prescribed periods:
- 30% for property placed in service after December 31, 2016, and before January 1, 2020
- 26% for property placed in service after December 31, 2019, and before January 1, 2022
- 30% for property placed in service after December 31, 2021, and before January 1, 2033
- 26% for property placed in service after December 31, 2032, and before January 1, 2034
- 22% for property placed in service after December 31, 2033, and before January 1, 2035
- How to Claim the Federal Tax Credits
- Strategies to Maximize Your Federal Tax Savings
- Claim the credits using the IRS Form 5695.
- Instructions for Form 5695
- Instructions for Form 5695 (Print Version - PDF)
What products are eligible?
Solar Water Heaters
Solar water heaters come in a wide variety of designs, all including a collector and storage tank, and all using the sun's thermal energy to heat water. Solar water heaters are typically described according to the type of collector and the circulation system.
Requirements
At least half of the energy generated by the "qualifying property" must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
Note: The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling.
Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirements.
Tax Credit includes installation costs.
The home served by the system does not have to be the taxpayer's principal residence.
Solar Panels (Photovoltaic Systems)
Solar Panels or Photovoltaic Systems are solar cells that capture light energy from the sun and convert it directly into electricity. Use this buying guidance to learn more about your options, ask the right questions of contractors, and determine if rooftop solar is right for you.
Requirements
Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirements.
The home served by the system does not have to be the taxpayer's principal residence.
Who can use this credit?
Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify. This system must be installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.
The home served by this system does not have to be the taxpayer's principal residence.
A principal residence is the home where you live most of the time. The home must be in the United States. It can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home.