☀SolarSavingsMath

Solar Federal Tax Credit Calculator

Exactly how much you'll save from the 30% Residential Clean Energy Credit + your state's incentives — with carryforward calculations if the credit is bigger than your tax bill.

For estimated installed cost and any state-level credits.
Typical US home: 6-10 kW.
Batteries ≥3 kWh qualify for the same 30% credit.
Total federal income tax owed (line 24 on Form 1040). Not refund or withholding.
Credit phases down after 2032 under IRA scheduled.

Defaults from state averages — override if you have quotes.

SEIA/Wood Mackenzie state averages.
2026 average $850-$1,100/kWh installed.
NY 25%, SC 25%, NM 10%, MA 15%. Most states $0.
NY max $5,000; SC max $3,500. 0 = no cap.
Enter your system size to see your tax credit.
Solar system cost (gross)—
Battery storage cost—
Total installed cost—
Federal credit (30% in tax year)—
State credit—
Total tax credits available—
Net cost after all credits—
Want to see total 25-year savings and payback?

Use the Solar Payback Calculator → to model full lifetime ROI.

How the 30% federal solar tax credit actually works

The Residential Clean Energy Credit (formerly the ITC, or Investment Tax Credit) is the single biggest financial incentive for going solar. It's a dollar-for-dollar reduction of your federal income tax — not a refund, not a deduction. If your solar install costs $30,000, you get $9,000 off your federal taxes for the year you turn the system on.

What's included in the credit

What's NOT included

The IRA schedule (currently in law)

What if your credit is bigger than your tax bill?

This is the most common question. The credit is non-refundable, meaning it can't reduce your tax bill below zero — you won't get cash back beyond your actual tax owed. But unused credit carries forward indefinitely (no expiration), so you'll claim the remainder against future years' taxes until fully used.

Example: Your install qualifies for $9,000 in federal credit. You owe $4,500 in federal tax this year. You'll claim $4,500 this year, leaving $4,500 to carry forward. Next year, if you owe $4,500 again, you claim the remaining $4,500. Done — full credit used over two years.

How to actually claim it

  1. Install solar in the tax year you want to claim the credit
  2. Keep all invoices and a Manufacturer's Certification Statement from your installer
  3. File IRS Form 5695 with your 1040 (it's free, ~15 minutes if you use TurboTax/H&R Block)
  4. Carryforward unused credit on Form 5695 in subsequent years

State-level solar tax credits worth knowing

A handful of states stack their own income tax credit on top of the federal 30%. As of 2026:

Many other states offer property tax exemptions, sales tax exemptions, or net metering instead of (or in addition to) income tax credits. Always check DSIRE for your specific state and utility.

FAQ

How much is the federal solar tax credit in 2026?

30% of your total installed solar system cost, including labor and permits. The 30% rate runs through 2032; it phases down after that.

What if my tax liability is less than the credit?

The credit is non-refundable but carries forward indefinitely. If you owe $4,500 in federal tax and qualify for $9,000 in solar credit, you'll claim $4,500 this year and $4,500 next year. No expiration on carryforward.

Does the credit cover batteries?

Yes — battery storage systems with 3 kWh or greater capacity qualify for the same 30% credit. This was added by the Inflation Reduction Act in 2022 and applies whether you install batteries with or without solar panels.

Do I have to itemize to claim the solar credit?

No. The Residential Clean Energy Credit is a tax credit, not a deduction. You claim it via Form 5695 regardless of whether you itemize or take the standard deduction.

Can I claim the credit if I lease the panels?

No. The credit goes to the system owner. If you lease or sign a PPA (Power Purchase Agreement), the leasing company gets the credit (and may or may not pass savings through to you).

Primary sources