30% tax credit?
- Thread starter Flunkyboi
- Start date
Heatpumpman
Solar Enthusiast
Yes, the tax credit would apply to the full cost of the system, including installation costs.
TomC4306
Solar Obsessive
Residential Clean Energy Credit | Internal Revenue Service
If you invest in renewable energy for your home such as solar, wind, geothermal, biomass, fuel cells or battery storage, you may qualify for a tax credit.
scrubjaysnest
Solar Enthusiast
Yes, if it hasn't been cancelled by the Trump administration.
Note that it's statutory, so they have to get congress to legislate, rather than just ordering it out of existence. Congresscritters may be itchy about changing this one with immediate effect rather than, say, pulling in its sunset date. Or they might just leave it alone - after all, the foreign equipment will be paying the tariff.
Also note that the credit doesn't happen until the tax return after the tax year when you get it running and the approvals to use signed off. So they have until next spring to repeal it for stuff up and running this tax year, etc.
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MikeInKingman
New Member
As ULR pointed out, tax credits apply to the tax year you built the system in.
And make sure you are aware that these are CREDITS, not DEDUCTIONS.
If you have Fed taxes you owe, you can spend these credits like money to pay owed taxes.
If you don't owe Fed Taxes, then you can't really use them.
They can be used piecemeal, so if you had more credits than what you owed in a given year...use what you need of the credits, and save the rest for the next tax year.
More details for Fed and State programs are here:
www.dsireusa.org
State specific rebates and tax credits for you are here:
programs.dsireusa.org
You'll also want to look and see what if anything your utility company offers, and how they handle buying power back from you.
Purchase nothing until you have a plan.
Get as many quotes as possible.
And make sure you are aware that these are CREDITS, not DEDUCTIONS.
If you have Fed taxes you owe, you can spend these credits like money to pay owed taxes.
If you don't owe Fed Taxes, then you can't really use them.
They can be used piecemeal, so if you had more credits than what you owed in a given year...use what you need of the credits, and save the rest for the next tax year.
More details for Fed and State programs are here:
Database of State Incentives for Renewables & Efficiency® - DSIRE
The most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Managed by NCSU.
www.dsireusa.org
DSIRE
programs.dsireusa.org
Purchase nothing until you have a plan.
Get as many quotes as possible.
That clears it up. I appreciate it.As ULR pointed out, tax credits apply to the tax year you built the system in.
And make sure you are aware that these are CREDITS, not DEDUCTIONS.
If you have Fed taxes you owe, you can spend these credits like money to pay owed taxes.
If you don't owe Fed Taxes, then you can't really use them.
They can be used piecemeal, so if you had more credits than what you owed in a given year...use what you need of the credits, and save the rest for the next tax year.
More details for Fed and State programs are here:
State specific rebates and tax credits for you are here:Database of State Incentives for Renewables & Efficiency® - DSIRE
The most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Managed by NCSU.
You'll also want to look and see what if anything your utility company offers, and how they handle buying power back from you.DSIRE
Purchase nothing until you have a plan.
Get as many quotes as possible.
Tulex
Solar Wizard
Also keep in mind that some states have credits. But, they all differ in what/how to qualify. NY for example 2 years ago when I installed had a 25% credit up to $5K I believe, but you had to show proof of being grid tied with agreements. Fed credit has absolutely no requirements other than it has to be related solely to solar (or purchased to install the solar, such as tools needed), has to be put into service that year, and can't have been used for a credit previously. And you can do it multiple years. Add on next year, claim more credit.
Actually, it's a "Residential Clean Energy tax credit" and can be used for a lot of things other than solar. From Publication 5977 (Rev. 11-2024) "How to claim a Residential Clean Energy tax credit" (https://www.irs.gov/pub/irs-pdf/p5977.pdf)
So you could, for instance, install a hybrid inverter and battery system just for time-shifting power from cheap hours to use (or sell back) at pricey hours and take the credit.
When you get down to the details about filing Form 5695 you'll see that, while some of the credits (e.g. fuel cells) are limited to your "main home", many (including solar roofing and panels, wind machines, heat pumps, ...) are (explicitly!) not, and can be used (simultaneously) on any "home" you've lived in part of the time during the year:
So you could, for instance, claim credits on the solar system, wind turbine, and geothermal heat pump for your primary residence, the solar system and minisplits on your vacation house, the systems on the trailer you lived in on vacation or a work site, and the solar system on the yacht you lived aboard during a yacht-club sail-in during the year you installed it, all on the same (busy!) year.
It's not a "refundable" credit - you can only use enough of it to drive your taxes down to zero, not go negative and have the government pay you money you didn't give them first. But if you have more credit than taxes you can "carry over" the extra to reduce your taxes in future years.
jeeptj12
Noob
I'm waiting until the end of the year before I'm pulling the trigger on any expansion. That way we have confidence we will get the 30% or not.
Q-Dog
¯\_(ツ)_/¯
I don't believe they are stupid enough to cancel the credit 3 months into the year.
Rider
Solar Addict
I got the 30% tax credit when I did my taxes this year. Covered my Anker F3800, spare battery, solar panels, Home Smart Panel, sub-panel, all the wiring and parts and the install costs of an electrician.
I also got credits for a new exterior door, and last year for a new picture window. Absolutely worth looking into.
jeeptj12
Noob
You're talking about the Government.
SunDave
Solar Wizard
Hi. Sorry you will have to wade through all the political crap to look for answers. People seems to be unable to separate their thoughts these days.
The federal tax credit is 30% on new equipment only, so definitely research the credit carefully before spending. It can be tricky to fill out the first time when applying for the credit. I did a second credit in 2024 and it was simple. Keep receipts in case of an audit.
Look for state credits as well. Some states have tax exemptions for solar equipment. You may have to apply for them after you paid tax, or some vendors can remove it for you at the time of purchase once you submit the correct form.
Research is key to Solar in general. There is a thin margin between a system that will "pay for itself" and one that won't. It's very hard to make a first system successful. Learning from smaller solar setups is a good idea. I went through 3 before I went for the big whole home install with batteries. I did that in two phases as well since the tax credit allows for that.
Good luck with your project.
Tulex
Solar Wizard
rcht148
New Member
The bill to repeal EV tax that was introduced recently would take effect in 30 days after it is passed (assuming it passes).
https://www.reuters.com/business/au...tax-new-ev-sales-pay-road-repairs-2025-02-12/
Hopefully, they will do something similar for solar so we have a heads up.
Offthewall
Solar Enthusiast
IF they repealed the tax credit, it would be effective for that date or future date. If you purchase and place in service prior to that date you should be fine taking the tax credit when you file your 2025 tax return (given you purchase/place in service in 2025).
Wish that were true. But there is precedent for passing federal tax hikes after the taxed transaction occurs but before the filing deadline for the tax year NOT being a prohibited "ex post facto" law. (Don't recall exactly when but I think it was the Obama or maybe the Clinton administration.)
I think that's nuts, since the decision was made before the legislation, but real world politics and legal shenanigans....
Edit: in August of 1993, Congress passed the Omnibus Budget Reconciliation Act (OBRA) of 1993, which increased the top ordinary income tax rate to 39.6% and the estate/gift tax rate to 55%. Despite not being enacted until August, the changes were made retroactive to the beginning of 1993.
Biden also did a capital gains raise in 2021.
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Offthewall
Solar Enthusiast
Bires
Solar Enthusiast
I think I know the answer, but want a little confirmation:
The credit still applies if:
The equipment isn't pro installed.
The equipment isn't grid tied.
Right?
The credit still applies if:
The equipment isn't pro installed.
The equipment isn't grid tied.
Right?
Q-Dog
¯\_(ツ)_/¯
Yes.
fatjay
Solar Wizard
But from what it says, it must be operational and placed in service.
What makes you believe the credit does not apply if it’s professionally installed?
I’ve never seen that in any IRS documents.
Same for grid tie.
Tulex
Solar Wizard
Because it's a requirement for some state credits. NY for example, it has to be grid tied with an agreement for the state credit. For their heat pump credit, I couldn't claim it 6 years ago because the system wasn't professionally installed. Feds didn't care.
Osmethne
Solar False Prophet
Yes and yes.
I've used this tax credit for the past two years. Not a tax expert though. It is remarkably lenient. New solar or battery equipment put into service in your house. At no point does it mention having to pass any inspection or get any kind of certification.
The noise coming from the government about cancelling it is concerning. Though is pressure from both sides to keep it. Just the way the law works I think you're good to use it at least this year. Personally I'd be nervous to rely on it as things are.
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