Solar Tax Credit Calculator

Calculate your 30% federal ITC — enter every cost component and see the exact credit amount.

Installation year & system size

Installation year?

System size?

Cost breakdown (all ITC-eligible)

Solar panels?

Inverter?

Battery storage?

Wiring & electrical?

Installation labor?

Permits & fees?

Federal ITC credit (30% for 2026)

-$6,300 credit

Total eligible costs$21,000

ITC (30%)-$6,300

Net cost after ITC$14,700

Effective $/W after ITC$1.84/W

Credit breakdown by component

Solar panels-$3,600

Inverter-$900

Wiring & electrical-$450

Installation labor-$1,200

Permits & fees-$150

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How to Use This Calculator

Select your installation year

The ITC percentage depends on the year you complete installation and claim the credit on your taxes. 2024-2032: 30%. The credit steps down to 26% in 2033 and 22% in 2034. After 2034, the residential ITC is currently scheduled to end. If you're considering solar, installing before December 31, 2032 locks in the full 30%.

Enter each cost component separately

All six categories are ITC-eligible for residential solar under the Residential Clean Energy Credit. Enter each line item from your installer's quote. If your quote is a single lump sum, use the Solar Cost Calculator's "cost per watt" approach instead and enter the total in the panels field.

Battery storage is now ITC-eligible

Since 2023, battery storage systems are ITC-eligible even if they're not charged exclusively by solar — as long as they're installed with a solar system in the same tax year. This makes adding a Powerwall or similar battery significantly more affordable. The ITC applies to the full installed battery cost.

Tax liability requirement

The ITC is a non-refundable tax credit — it reduces your federal income tax liability. If the credit exceeds your liability in year 1, the unused portion carries forward to future tax years (up to 5 years). You don't need to owe the full credit amount in year 1 to benefit.

The Formula

Total Eligible Costs = Panels + Inverter + Battery + Wiring + Labor + Permits ITC Amount = Total Eligible Costs × ITC Rate (30% through 2032) Net Cost = Total Eligible Costs - ITC Amount Effective $/W = Net Cost ÷ (System kW × 1,000) ITC Schedule: 2024-2032: 30% 2033: 26% 2034: 22% 2035+: 0% (residential)

Example

The Williams family — 10 kW system + Powerwall, 2026

The Williams are installing a 10 kW system plus a single Tesla Powerwall 3. Their installer provides a detailed quote.

Solar panels (25 × 400W)$14,000

Enphase microinverters$4,000

Tesla Powerwall 3$10,500

Wiring & electrical$1,800

Installation labor$4,500

Permits & fees$700

Total gross cost$35,500

30% ITC credit-$10,650

Net cost$24,850

The $10,650 ITC credit is applied to their 2026 federal tax return, reducing taxes owed dollar-for-dollar. If their tax liability is only $8,000 in 2026, the remaining $2,650 carries forward to 2027. The effective cost per watt drops to $2.49/W net — an excellent price for a system with battery storage included.

FAQ

How do I claim the solar tax credit? ▼

File IRS Form 5695 (Residential Energy Credits) with your federal tax return for the year you installed solar. The credit flows from Form 5695 to Schedule 3, and then to your Form 1040. You don't need to itemize deductions — the ITC is a credit, not a deduction. Keep all installation receipts and your installer's final invoice. Most tax software (TurboTax, H&R Block) walks you through this automatically.

Can I claim the ITC if I get a solar loan? ▼

Yes — the ITC applies to owned systems, whether purchased with cash or a loan. Many solar loans are structured with a first-year balloon payment equal to the ITC amount — the lender expects you to apply your tax credit toward the loan principal. If you don't apply the credit to the loan, your outstanding balance remains high. Carefully read your loan terms regarding the ITC balloon payment requirement.

Does the solar tax credit apply to rentals and second homes? ▼

The Residential Clean Energy Credit (residential ITC) applies to your primary residence and a second home used personally (not rented). Solar on a rental property doesn't qualify for the residential ITC, but may qualify for the commercial ITC (Investment Tax Credit, also 30%) under Section 48. The commercial ITC has different rules and may require depreciation recapture. Consult a tax professional for rental property solar.

What if my tax credit is bigger than my tax bill? ▼

The unused credit carries forward up to 5 years. Example: $9,000 ITC, $6,000 tax liability in year 1. You use $6,000 in year 1 and carry $3,000 forward to year 2. The credit cannot be refunded — if your tax liability stays very low for 5+ years, you may not fully use the credit. Retirees with low fixed income and homeowners who claim many other deductions are most at risk of under-utilizing the ITC.

Are state solar incentives in addition to the federal ITC? ▼

Yes — state incentives stack on top of the federal ITC. New York offers a 25% state tax credit (up to $5,000). California has SGIP battery rebates ($150-300/kWh). Massachusetts has the SMART program (performance-based incentive). Florida, Texas, and many other states have no income tax and therefore no state tax credit, but many utilities offer rebates separately. Visit dsireusa.org for a comprehensive database by state.