Jhe investment tax credit (ITC)also known as federal solar tax creditgive to people in the United States the ability to subtract 26% of the cost of installing sonar energy on their home from their federal tax bill.
There is no cap on the value when it comes to claiming the federal solar tax creditthe average EnergySage Marketplace customer saving nearly $9,000 by switching to solar with the ICC.
How does the Federal Solar Tax Credit work?
As long as you own your solar power systemyou will be eligible to receive the federal solar tax credit. The credit can be carried over if you are not taxable enough to get the full savings, which means you can get the credits in later years if the credit is in effect.
For anyone who signs a lease or power purchase agreement (PPA) with a solar installer, however, you will not be the owner of the solar power system and that means you will not be able to claim the federal solar tax credit.
It should also be kept in mind that there is no income limit when it comes to claiming this credit, so everyone is eligible.
Federal Solar Tax Credit Eligibility
Your solar photovoltaic (PV) system must have been installed between January 1, 2006 and December 31, 2023, while it must also have been installed at your primary or secondary residence in the United States.
In the case of an offsite community solar project, the amount of electricity produced is deducted from the electricity consumption you use in your home.
You have to own solar PV system, meaning you bought it outright or agreed to pay for it through a loan. It is impossible that you have signed a lease or a PPA.
The solar photovoltaic system you use must be new or used for the first timeso if you bought a house with a solar power system, you won’t be able to get the credit.