Solar Tax Credit Calculator

The federal residential clean energy credit (commonly called the solar ITC) covers 30% of qualified clean energy expenditures through 2032 under the Inflation Reduction Act of 2022. The rate steps down to 26% in 2033, 22% in 2034, and expires for residential systems in 2035.

Qualified expenditures include solar PV panels, inverters, racking, balance-of-system components, labor, and standalone or paired battery storage of at least 3 kWh capacity. We add your system cost and battery cost together, then apply the rate that corresponds to your install year.

The credit is nonrefundable but can be carried forward to future tax years if it exceeds your liability. Many state incentives are layered on top of the federal credit.

The federal solar Investment Tax Credit (ITC) is the single most important policy lever in residential solar economics. The Inflation Reduction Act of 2022 extended and expanded the credit, locking the 30% rate in place through 2032 and adding standalone battery storage as a qualified expenditure.

The credit is structured as a dollar-for-dollar reduction in your federal income tax liability. On a $25,000 system, that's a $7,500 credit — money that comes off your federal taxes for the year the system is placed in service. If your tax liability is less than the credit value, you can carry the unused portion forward to future tax years.

For most homeowners, the practical effect is a 30% reduction in the upfront cost of going solar. State incentives sit on top of the federal credit, so a homeowner in a state with strong programs (New York, Massachusetts, Maryland) may see total incentives covering 35–45% of the system cost. Always consult IRS Form 5695 instructions and a tax professional to apply the credit correctly to your specific situation.