The Federal Solar Investment Tax Credit
Of the many solar incentives available, the federal solar tax credit (known as the Investment Tax Credit, or the ITC), can offer big savings on the cost of going solar. Good news for homeowners and businesses as the tax credit was extended for a decade in August of 2022 with the passage of the Inflation Reduction Act (IRA). Under the new schedule, the federal solar tax credit allows you to reduce the amount of federal taxes you owe by 30% of your total installation costs until 2032. And if that 30% is larger than what you owe in taxes, you can roll the remainder over for another year!
Plus—while your solar battery system could previously only qualify for the tax credit as long as it received 100% of its energy from renewable sources—starting in 2023, stand-alone solar battery storage systems will also qualify for the tax credit.
To be eligible to claim the solar tax credit, you must own your solar panels (no leasing), have sufficient taxable income, and own the property where the solar energy system is being installed.