What is the current status of this program?
The IRA made these credits available through 2032, but the budget reconciliation bill signed July 4, 2025 ended them after December 31, 2025. If you purchased renewable energy systems for your home after that date, you do not qualify for the tax credit.
See below under “What other incentives could I use to help me accomplish my goals?” for options to lease solar or geothermal systems (thus taking advantage of commercial tax credits that expire later than the residential credits).
Note: some links to Federal websites below (the ones with “web.archive.org” or “bidenwhitehouse.archives.gov” in the URL) are archived versions no longer being updated.
What does this funding get me?
This credit pays back up to 30% of the cost of solar, wind, geothermal, and battery storage.
Am I eligible?
You are eligible if you pay taxes, you purchased the clean energy system on or before December 31, 2025, and the home where the equipment is installed is your principal residence. This includes renters, although you would need the permission of your landlord to install the systems.
How can I access the money?
You pay for the equipment upfront with cash or a loan, then file Form 5695 with your Federal tax return for the year in which you installed the equipment. This will reduce the amount of tax you pay by 30% of the cost of the equipment.
If that amount is more than the tax you owe that year, you can carry over the unused part of the credit to future years’ tax returns.
What is the timeline?
The IRA made this credit available every year through 2032, after which it was scheduled to gradually phase out (to 26% in 2033, 22% in 2034, and 0% in 2035). However, the budget reconciliation bill signed July 4, 2025 ends this credit after December 31, 2025.
Until 2024, you claimed the credit on your tax return for the year in which your equipment became operational or was placed in service. That may still be the intent of the law, but the budget reconciliation bill of July 4, 2025 changed the terminology to disallow the credit for any expenditures made after December 31, 2025. Therefore, you may still be able to claim the credit on your 2025 tax return (due April 15, 2026) if you paid for the system in full before the end of 2025, even if it is not installed until 2026. However, you should check with your solar installer, your accountant, or the contacts at the bottom of this page to make sure you are doing whatever is necessary to ensure you are eligible for the credit.
What other incentives could I use to help me accomplish my goals?
- There is now a lease for residential solar and batteries in North Carolina.
- In July 2025, the NC Clean Energy Fund (now: Clean Energy Fund of the Carolinas) launched Carolina SURE (Smart Upgrades for Residential Efficiency), a consumer lending program for home electrification and energy efficiency improvements in North and South Carolina.
- If you are interested in a geothermal or thermal storage system, you might still be able to lease it and benefit from tax credits. This article explains that, since the commercial tax credit for geothermal is not expiring, a company that leases you geothermal and retains ownership of the system can receive the tax credit and use it to reduce customer prices.
- New loans may eventually be available through the IRA’s Greenhouse Gas Reduction Fund.
- Grants or loans for solar may eventually be available to low-income homeowners (possibly by 2026) through the Solar for All program.
- Check the Database of State Incentives for Renewables & Efficiency (DSIRE) for additional incentives that may be offered by your state, local government, or utility, as well as important federal, state, and local policies. For questions regarding DSIRE, contact Justin Lindemann (NC Clean Energy Technology Center) at jplindem@ncsu.edu.
- Check out our (non-exhaustive) list of non-federal funding from other sources that may fit your energy and cost-saving goals.
Where can I get more information?
- Solar Scam Awareness & Prevention Information (English and Spanish)
- IRS web page on residential clean energy credits
- IRS Frequently Asked Questions Fact Sheet for this credit
- Department of Energy guide to solar tax credit (Spanish: Guía: Crédito Fiscal Federal por Energía Solar)
- Your tax preparer
- Randy Lucas (licensed CPA specializing in energy incentives), website, randy@lucastaxandenergy.com, 704-412-1522
- Rewiring America offers a tax credit calculator to help you maximize your tax credits on home energy upgrades as well as a a Personal Electrification Planner that generates a customized plan in less than 5 minutes to help users go electric based on their unique home, lifestyle, and priorities. *Due to Rewiring America’s changed privacy policy, any data you input may be sold to third parties.
- The company installing your clean energy equipment. (Need to find one? Start your journey by getting quotes from one or more of the companies listed on the NC Sustainable Energy Association’s Solar Business Code of Conduct, Amicus Cooperative membership list, or NABCEP certification list. All these companies have committed to good business practices. Use caution if responding to online or door-to-door solar sales pitches, some of which have been found to use fraudulent practices.)
- NC Clean Energy Technology Center’s A Word to the Wise guide to home energy upgrades, which has more information on this incentive and others, plus hints on hiring contractors (English) (Spanish)
- Sierra Club Shopping Guide for Healthy & Affordable Home Upgrades
- Treasury Department resources on IRA, including tax guidance
- For specific questions on this program or for more assistance, contact Sally Robertson at info@energyfundsforall.org. Please note this contact is not a certified tax professional.