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Federal Solar Tax Credit Calculator
Calculate your federal solar tax credit eligibility and amount for residential systems placed in service in 2023–2025 and for business or commercial systems. The residential credit has expired for systems placed in service in 2026 or later — this calculator flags that automatically.
Educational calculators — always consult a licensed professional before making financial decisions.
Include panels, inverter, racking, and installation labor.
This is the year the system became operational, not the year you signed a contract.
Last year the 30% federal residential credit applies — expired after Dec 31, 2025.
Business systems can still qualify for a federal credit even in 2026 and beyond.
A homeowner's primary or secondary residence.
Utility rebates typically reduce the basis you can claim the federal credit against. State tax credits usually don't.
Estimated federal tax credit
$6,000
Residential system, placed in service in 2025
Eligibility note
Residential systems placed in service in 2025 qualify for the 30% federal Residential Clean Energy Credit (Section 25D). This credit is nonrefundable — it reduces your tax liability but doesn't generate a refund — though unused amounts could generally carry forward to future tax years. File IRS Form 5695 with your federal tax return for that year.
Estimates reflect national averages for educational purposes only. Equipment prices and labor rates vary by region. Always get 2–3 quotes before proceeding. This is not tax advice. Consult a licensed tax professional to confirm your eligibility and how to claim this credit.
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What you'll need
- ·Total system cost before any credit
- ·The year the system was (or will be) placed in service
- ·Whether the property is residential or business/commercial
- ·Any utility rebate that reduces your system cost basis
What you'll get
- ✓Estimated federal tax credit — Based on install year and property type
- ✓Credit rate and basis — See exactly how the credit is calculated
- ✓Net cost after credit — System cost minus rebate and credit
- ✓Plain-language eligibility note — Explains why you do or don't qualify
Federal solar tax credit overview
The federal residential solar tax credit (Section 25D, the Residential Clean Energy Credit) offered 30% back on residential systems placed in service through 2025, but has expired for expenditures made after December 31, 2025. Business and commercial systems remain eligible for the 30% Section 48E investment tax credit regardless of year. Verify your specific eligibility with a licensed tax professional.
How it works
Enter your system cost
Tell us your total system cost and when it was (or will be) placed in service.
Select property type
Residential systems installed 2023–2025 qualify for 30% — business systems can still qualify in 2026+.
Get your credit estimate
See your estimated federal tax credit amount, credit rate, and net cost after credit.
Federal Solar Tax Credit by Install Year & Property Type
| Property Type | Install Year | Credit Rate |
|---|---|---|
| Residential | 2023 – 2025 | 30% |
| Residential | 2026 or later | 0% — expired |
| Business / Commercial | Any year | 30% (Section 48E) |
The residential federal solar tax credit (Section 25D) expired for expenditures made after December 31, 2025. Business systems can still claim the Section 48E credit. This is not tax advice — consult a tax professional.
Important: the residential credit has expired
The 30% federal residential solar tax credit (Section 25D) applied to systems placed in service through December 31, 2025. Under 2025 legislation it was terminated for expenditures after that date, so a residential system installed in 2026 or later does notqualify for the 25D credit. Use this calculator to check a 2022–2025 installation, or a business/commercial system.
How the federal solar tax credit worked
The Residential Clean Energy Credit (IRS Section 25D) let homeowners subtract 30%of a qualifying solar system's cost directly from their federal income tax. On a $20,000 system that was a $6,000 credit. It was nonrefundable — it could reduce your tax bill to zero, and any unused amount could be carried forward to future years while the credit existed.
Residential (25D) vs. commercial (48E)
- Section 25D (residential). For homeowners on their own home. 30% through 2025; expired for expenditures after Dec 31, 2025.
- Section 48E (commercial / business). For businesses and third-party-owned systems (leases/PPAs). Still available with its own base rate, bonus adders, and phase-down schedule — consult a tax professional.
A leased or PPA system was never eligible for the homeowner's 25D credit because the installer, not the homeowner, owned the system.
What qualified & how it was claimed
- Eligible costs: panels, inverters, mounting/racking, wiring, sales tax, permitting, and installation labor.
- Battery storage: standalone or paired batteries of at least 3 kWh capacity qualified (added in 2023).
- Claiming it: filed with IRS Form 5695 for the tax year the system was placed in service.
Incentives still available in 2026
Even without the federal residential credit, many buyers still reduce cost through state tax credits and rebates, utility rebates, SREC markets, net metering, and property/sales-tax exemptions. Look these up on DSIRE (dsireusa.org) and with your utility. This calculator is educational and not tax advice — confirm eligibility and amounts with a qualified tax professional.
Frequently asked questions
Is the federal solar tax credit still available?+
It depends on the property. The residential federal solar tax credit (Section 25D, the Residential Clean Energy Credit) has expired — it does not apply to expenditures made after December 31, 2025. The commercial credit (Section 48E investment tax credit) remains available at 30% for business and commercial solar systems regardless of year.
What's the difference between Section 25D and Section 48E?+
Section 25D is the residential Clean Energy Credit that applied to homeowners' solar installations, offering 30% back through 2025 before expiring. Section 48E is the commercial investment tax credit for business, rental, and commercial solar projects, which remains active at 30%, though larger projects must meet prevailing wage and apprenticeship requirements to earn the full rate.
How do I claim the federal solar tax credit?+
Residential filers who qualify (systems placed in service through 2025) file IRS Form 5695 with their federal tax return for the year the system was placed in service. Commercial filers claiming the Section 48E credit generally use IRS Form 3468. In both cases, keep your installation contract, proof of payment, and in-service date documented, and confirm the details with a tax professional.
What reduces my solar tax credit basis?+
Utility rebates typically reduce the cost basis you can claim the federal credit against, since they lower what you actually paid for the system. State tax credits and most other incentive programs usually don't reduce your federal credit basis. Check your specific rebate or incentive program's terms, or ask a tax professional, since rules can vary.
Can I carry forward an unused solar tax credit?+
Yes, generally. Both the residential and commercial solar credits are nonrefundable, meaning they can only reduce your tax liability rather than generate a refund — but if your credit exceeds what you owe in a given year, the unused portion can typically carry forward to future tax years. Confirm the specifics of your situation with a licensed tax professional.
Want to try different numbers?
Back to the calculator ↑Federal Solar Tax Credit Calculator is built and maintained by the RealCostIQ editorial team. Cost ranges and rates are checked against published industry data and contractor quotes, and revised when the underlying figures move. Read our data methodology or more about who builds this. Every calculation runs in your browser — no account, and none of your inputs are stored.
Cost ranges and rates here are checked against contractor quotes and published industry data. If a number still looks off, email Support@RealCostIQ.com and we'll review and fix it.