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! 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. (This credit was recently increased from 26% and is secured at 30% through 2032 thanks to the Inflation Reduction Act.)  

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?

• Yes! Whether your battery is charged by solar panels or not, you can also get the 30% ITC for your home battery.
  
  Please note: GMP Storage lease customers are not eligible. 

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