Federal Tax Credits: Solar Energy Systems

Solar Heater

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 electical  code requirements.

Tax Credit includes installation costs.

More Information

Under the Consolidated Appropriations Act of 2021, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems. 

Tax Credit: 

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2023
  • 22% for systems placed in service after 12/31/2022 and before 01/01/2024

Expires:  December 31, 2023

solar panelSolar Panels (Photovoltaic Systems)

Solar Panels or Photovoltaic Systems are solar cells that capture light energy from the sun and convert it directly into electricity.

Requirements

Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirements.

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