These rules apply only to systems that were fully installed on or before December 31, 2025 — the federal ITC is not available for systems installed in 2026 or later. See the disclaimer above.
New installation only
The 30% ITC applies to new solar panels and battery systems installed on a U.S. property. Previously installed systems do not qualify.
Primary or secondary residence
Qualifying properties include your main home, a vacation home, or even off-grid solar on land you own. Pure rental properties use a different depreciation path (IRS Form 3468).
You own the system — not leased
If you lease solar or use a PPA (Power Purchase Agreement), the tax credit goes to the leasing company, not you. To claim ITC you must own the system outright or via a solar loan.
Battery charging-source rule (2023–2025 installs)
Standalone battery storage added from 2023 through Dec 31, 2025 was ITC-eligible at 30% regardless of charging source. Batteries installed before 2023 had to be charged exclusively by solar to qualify. This entire ITC pathway ends for systems installed in 2026 or later.
You must have federal tax liability
The ITC reduces dollar-for-dollar what you owe in federal income taxes. If your tax liability is $0, you cannot use the credit that year — but it carries forward to future years when you do owe taxes.
File IRS Form 5695
Claim the credit on IRS Form 5695 (Residential Energy Credits) and attach to your Form 1040. Your solar installer should provide documentation of total system cost.
These state and utility programs are separate from the federal ITC and are unaffected by its December 31, 2025 expiration. The table below highlights some of the most valuable programs — check your state's energy office for current details.
| State | Program | Benefit |
|---|---|---|
| New York | NY-Sun / State Tax Credit | 25% state credit (up to $5,000) + NYSERDA rebates |
| Massachusetts | SMART Program + State Credit | 15% state credit (up to $1,000) + production payments |
| Maryland | CleanEnergy Grant | $1,000 residential grant + property tax exemption |
| New Jersey | SuSI Program | Successor solar incentive + 4% sales tax exemption |
| South Carolina | SC Tax Credit | 25% state credit (up to $3,500) |
| Arizona | AZ Residential Credit | 25% state credit (up to $1,000) + sales/property tax exempt |
| Connecticut | PACT Program | Bill credits + zero interest PACE financing |
| California | SGIP Battery Rebate | $150–$1,000/kWh for qualifying battery storage |
| Texas | No state income tax | No state income tax (ITC less relevant) + property tax exemption |
| Colorado | RENU Loan / XCEL Rebate | $500–$1,500 utility rebates + low-interest state loans |
The calculator applies the federal credit rate that matched your selected installation year (30% for systems fully installed on or before December 31, 2025, $0 for 2026 and later) to your ITC-eligible basis, adds any state credit you enter, and nets the total against your system cost.
ITC-eligible basis = System cost + Battery cost − Utility rebate (state rebates do not reduce the basis)
Federal ITC = ITC-eligible basis × 30% (if fully installed on or before Dec 31, 2025) or × 0% (2026 or later)
Total credits = Federal ITC + State credit
Net out-of-pocket cost = System cost + Battery cost − Total credits − Utility rebate
• ITC-eligible basis: $28,000 + $10,000 − $500 = $37,500
• If fully installed on or before 12/31/2025: Federal ITC = $37,500 × 30% = $11,250. Total credits = $12,250. Net cost = $28,000 + $10,000 − $12,250 − $500 = $25,250.
• If installed in 2026 or later: Federal ITC = $0 (expired). Total credits = $1,000 (state credit only). Net cost = $28,000 + $10,000 − $1,000 − $500 = $36,500.
Same system, same incentives entered — the only difference is installation date, which is why the Installation Year field above matters so much to your result.
Sources: federal credit expiration and carryover rules per IRS.gov — Residential Clean Energy Credit and the One Big Beautiful Bill Act. State incentive figures should be cross-checked against the DSIRE database, which tracks program changes. Page last reviewed for accuracy August 13, 2026.
The federal ITC expired December 31, 2025. The answers below explain how the credit worked for systems installed on or before that date.