Who Qualifies for the Inflation Reduction Act Solar Tax Credit?
The Inflation Reduction Act of 2022 did great things for the solar energy industry. The new law includes a number of incentives for residential solar and battery installation. Most notably, it improved upon the existing Investment Tax Credit, also known as the federal solar tax credit. The new Inflation Reduction Act solar tax credit is worth 30% of your solar installation costs and will be available until 2032.
Want to learn more about the solar tax credit? Check out our Guide to the Federal Solar Tax Credit in 2024.
To get your credit, you first need to find out if you qualify for the federal solar tax credit. Almost all residential solar projects qualify—use this checklist to find out if you’re eligible for the federal solar tax credit in 2023.
✔ The Solar PV System Is Installed at a Residence You Own in the US
To be eligible for the solar tax credit, your solar energy system must be installed at a home you own that’s located in the United States. Homeowners in all 50 states and all US territories are eligible for the solar tax credit.
You can claim the solar tax credit for a solar panel installation at your primary residence and/or secondary residence. If your secondary residence doubles as a rental property, it is not eligible for the residential solar tax credit but may qualify for the commercial solar tax credit and other commercial solar incentives.
✔ You Own Your Solar PV System
You must own your solar panel system in order to claim the federal solar tax credit. Owning your solar system means you purchased the system with cash or financing. If you are leasing your solar energy system or participating in a Power Purchase Agreement (PPA), you are not eligible for the tax credit.
✔ You Have Taxable Income
Tax credits work by reducing the amount of income tax you owe in a given year. To use a tax credit, you need to have taxable income. If you don’t owe taxes, you will not be able to take advantage of the federal solar tax credit.
✔ The Solar Energy System Is New or Being Used for the First Time
To qualify for the Inflation Reduction Act tax credit, your solar panel system must be new and being used for the first time. You can only claim the solar tax credit on the original installation of your system, and previously used solar products are not covered.
✔ Your Installation Is Completed By December 31, 2023
You can only claim the solar tax credit for the year your installation is completed. So, to claim the solar federal tax credit in 2023, your solar panel installation must be completed by December 31, 2023.
Save 30% on Solar with the Federal Solar Tax Credit
SouthFace Solar & Electric is here to help you save as much as possible on your solar installation with the federal tax credit. We are Arizona’s leading residential solar installation company and we’ve helped hundreds of homeowners throughout the state take control of their own power production with solar panels. We follow a unique process to ensure our customers get the maximum value from their solar energy systems. Check out our completed projects to see what solar might look like on your roof and call us today for a free quote.
