Understanding the Federal Solar Tax Credit: What You Need to Know in 2025

 


If you've been considering going solar, chances are you've heard about the federal solar tax credit. But what exactly is it, how much can you save, and is it really going away?

Let’s break it down — simply, clearly, and with up-to-date facts.

✅ What Is the Federal Solar Tax Credit?

The federal solar tax credit, officially known as the Investment Tax Credit (ITC), is a financial incentive that allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes.

This credit applies to:

  • Solar panels for your home

  • Solar battery storage systems

  • Installation costs

  • Solar water heaters (in some cases)

So if your solar installation costs $20,000, you could receive a $6,000 credit on your federal tax return.

๐Ÿ•’ Is the Tax Credit Going Away?

Not yet! Thanks to the Inflation Reduction Act of 2022, the 30% tax credit has been extended through 2032.

Here’s the timeline:

YearCredit Amount
2025–203230%
203326%
203422%
2035 & Beyond0% (unless renewed)

So no — the solar tax credit is not going away in 2025. But the best time to lock in the highest savings is still right now.

๐Ÿ“ Who Qualifies for the Credit?

You qualify if:

  • You own your solar system (not leasing it).

  • The system is installed on your primary or secondary U.S. residence.

  • You have tax liability — meaning you owe federal income tax.

You do not need to owe the full 30% in one year. You can carry unused portions of the credit into future tax years.

๐Ÿ’ธ How Do You Claim It?

You’ll claim the solar tax credit when you file your taxes using IRS Form 5695. You’ll then enter the result on your regular tax form (1040).

Pro tip: Always consult a tax professional to ensure you maximize your return.

    Why Act Now?

  • Solar prices are steady, but installation demand is growing.

  • The tax credit covers battery storage, which makes your system more resilient.

  • Some state-level incentives are ending soon, even if the federal credit is still strong.

๐Ÿ’ฅ Bonus: Get a Free Solar Consultation

If you’re ready to explore going solar, I’ve partnered with Powur, a trusted solar provider. Click below to get a no-obligation quote and see how much you could save:

๐Ÿ‘‰ Get Your Free Solar Quote Here: powur.com/lighttheway

Solar energy isn’t just about reducing your electricity bill — it’s about investing in your future and helping the planet. With the 30% federal tax credit still available, there’s never been a better time to light the way forward.

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