The renewable energy tax credit is a law, extended by the federal government in December 2015 that allows a taxpayer claim a credit of 30 percent of qualified expenditures for a solar system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer.
Expenditures with respect to the equipment are treated as made when the installation is completed.
How long does the 30% federal solar tax credit last?
In relation to solar electricity the investment tax credit (ITC) offers an income tax credit for systems installed in each year as follows:
30% for systems placed in service by 12/31/2019
26% for systems placed in service after 12/31/2019 and before 01/01/2021
22% for systems placed in service after 12/31/2020 and before 01/01/2022
There is no maximum credit for systems placed in service after 2008.
Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
The home served by the system does not have to be the taxpayer's principal residence.
Is there financing available to cover the 30% solar panel tax credit until I do my taxes?
The solar industry is aware that many people do not have the financial capacity to pay for a system and then wait until they do their taxes for that year sometime the following year to get the federal solar tax credit back. Your solar installer will typically be able to offer you a loan product to cover this period as well as a longer term loan to cover the other 70% of the solar system.
What solar system costs are eligible for the solar panel tax credit
Eligible expenditure include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. Put simply this means that generally the entire value of your quote from a solar company to install solar panels is eligible for the tax credit.
Source: Solar Estimate