Implemented in 2006 as a result of the “Energy Policy Act of 2005”, the Investment Tax Credit (“ITC”) is a 30 percent federal tax credit for solar systems on residential and commercial properties that remains in effect until 2019. After this date it will drop to twenty-six percent in 2020, 22 percent in 2021, and will then remain at ten percent for commercial solar and drop down to zero percent for residential projects.
Any US taxpayer who purchases a solar system is eligible for this tax credit. The method of payment does not matter.
If you had your system installed through a solar lease or Power Purchase Agreement, then you are not eligible as you do not actually own the system. The leasing company owns it.
What do you need to do in order to qualify for the Federal Solar Tax Credit?
To qualify for the Federal Solar Tax Credit, you must have enough tax liability to qualify. If you are unsure about whether or not you qualify, you should talk with your tax professional.
You may use this form to apply for federal tax credits like the Solar Investment Tax Credit. This form is available through the IRS’s website or through your local tax office. The homeowner claiming the tax credits must submit this form along with their personal income tax 1040 return. For specific questions on claiming your Solar Investment Tax Credit please contact your accountant.