The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system. (Other types of renewable energy are also eligible for similar credits but are beyond the scope of this guidance.)

How are solar rebates excluded from federal taxes?

Under most circumstances, subsidies provided by your utility to you to install a solar PV system are excluded from income taxes through an exemption in federal law . When this is the case, the utility rebate for installing solar is subtracted from your system costs before you calculate your tax credit.

Can You claim the solar credit on a rental property?

The solar tax credit doesn’t apply for systems that you lease or for systems that you use to heat a swimming pool or hot tub. Claiming the solar credit for rental property you own You can’t claim the residential solar credit for installing solar power at rental properties you own.

When does the 10% solar credit expire?

By 2020, it’ll be worth 26%, then 22% in 2021. By 2022, residential solar systems won’t be eligible for this credit at all. Commercial products will still have the opportunity to claim the 10% credit, though. Now has never been a better time to take advantage of this credit.

Who was president when the solar tax credit was created?

The Energy Policy Act of 2005 marked the beginning of the federal solar tax credit when it was signed into law by then President George W. Bush. The first of the 550-page document describes the goal of the act: “To ensure jobs for our future with secure, affordable, and reliable energy.”

Do you get credit for energy efficient property?

Yes, the residential energy efficient property credit allows for a credit equal to the applicable percent of the cost of qualified property. Qualifying properties are solar electric property, solar water heaters, geothermal heat pumps, small wind turbines and fuel cell property.

Are there any solar tax incentives in California?

As more and more states like California launch 100% Renewable Portfolio Standard (RPS) targets, one can expect additional solar incentives to become available for homeowners residing in those areas. These incentives would ideally meet or exceed the federal tax credit as it goes away, but that’s very uncertain.