The federal solar tax credit, explained
A plain-English look at the residential clean energy credit and what it means for your payback.
How it works
The federal residential clean energy credit has let homeowners subtract 30% of the installed cost of a solar system from the federal income tax they owe. Rules and deadlines can change through new legislation, so always check the current IRS guidance or ask a tax professional before you sign.
A quick example
A typical 6 kW system at about $3.00 per watt costs roughly $18,000. A 30% credit would be about $5,400, bringing the net cost to about $12,600.
What it means for payback
Our state payback figures use the cost before incentives, so they are deliberately conservative. If you qualify for the credit, your real payback can be roughly a third shorter. Use the Quote Checker to see a quote before and after the credit.
Who can claim it
- You own the system (cash or loan), not lease it.
- It is installed on a home you live in, in the US.
- You have enough federal tax liability to use the credit (or carry it forward).
Frequently asked questions
Is the solar tax credit a refund?
No. It reduces the federal income tax you owe. If the credit is larger than your tax bill, the unused part can usually be carried forward to later years.
Does the credit apply to batteries?
Home batteries have generally qualified when installed with or without solar, subject to IRS rules. Confirm current eligibility with a tax professional.
Can I claim it on a leased system?
No. With a lease or power purchase agreement the system owner claims the credit, not the homeowner.
Estimates only. Actual results depend on your home, installer and local rules.