The IRA made these credits available through 2032, but the House budget passed in May would eliminate them at the end of 2025. Tell your Senators you want these credits to continue! Sen. Thom Tillis of NC signed a letter to the Senate majority leader in April cautioning him against a full-scale repeal of current tax credits, so he is a particularly critical swing vote.
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websites below (the ones with “web.archive.org” or “bidenwhitehouse.archives.gov” in the URL) are archived versions no longer being updated.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?
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 and the home where the clean energy systems are 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 30% credit is available every year through 2032, after which it will gradually phase out (to 26% in 2033, 22% in 2034, and 0% in 2035).
You claim the credit on your tax return for the year in which your equipment became operational. For example, if your solar system is turned on at any time in 2025, you would claim the credit on your 2025 tax return, which is due April 15, 2026.
What other incentives could I use to help me accomplish my goals?
New loans are beginning to be available through the IRA’s Greenhouse Gas Reduction Fund.
Grants or loans for solar will be available to low-income homeowners by late 2025 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.
Where can I get more information?
- 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.