Solar Investment Tax Credit (ITC) FAQ

There’s good news for folks planning to go solar this year: the federal government has signed on to help make it more affordable! At least in 2019, new solar homeowners are eligible for an income tax credit, amounting to no more than 30% of the total cost of your new solar system. 

Since this is a credit, not a rebate, you will not get cash for going solar. Rather you just don’t have to pay that amount in taxes —it’s more of an “instant tax refund.”

How do I claim it?

• You’ll need to fill out IRS form 5695
• It’s a bit complicated, but the IRS has a detailed explanation of the form here

How much can I claim?

• Solar owners are eligible to claim up to 30% of the total cost of their system
• The amount you can claim is limited to your taxable income
• If there are multiple earners in the household, the person with the larger income should file

What if I can’t claim my whole credit?

• File for the remaining amount of the credit in the next tax year
• You can write your credit off on your taxes until you’ve recouped 30% of the system cost or after claiming credits for up to five years after purchasing the system, whichever comes first. 

Is my battery eligible?

• If your battery is charged by solar panels, that cost can be included in calculating the ITC

Is my heat pump eligible?

• No, unfortunately, heat pumps are not eligible

Do I have to use the tax credits to pay down my loan?

• Short answer, no. However, your loan payments will go up.

We encourage folks who are interested in solar to consult a tax advisor to maximize this incentive.

Learn more about solar incentives in New York or solar incentives in Vermont