How to Apply for Solar Tax Credits & Save Money

Switching to solar power is one of the smartest investments you can make — not just for the environment, but for your wallet. Federal and state incentives make solar energy more affordable, helping homeowners and businesses save thousands on installation costs.

One of the most significant savings opportunities comes from solar tax credits, which can reduce what you owe in taxes simply by going solar. If you’re considering solar panels for your home or business, here’s what you need to know about available tax credits, how they work, and how you can claim them.

Residential Clean Energy Credit

The federal Residential Clean Energy Credit is a key incentive designed to make solar more accessible. Originally introduced as the Investment Tax Credit (ITC), this program was extended and expanded as part of the Inflation Reduction Act. Now, homeowners who install qualifying solar systems between 2022 and 2032 can receive a tax credit worth up to 30% of their system’s total cost — a significant savings that makes solar an even smarter choice.

How It Works

The Residential Clean Energy Credit allows homeowners to claim 30% of the total cost of their solar installation as a credit on their federal income taxes. That means if your system costs $20,000, you could receive a $6,000 credit.

A few key things to know:

• The credit is nonrefundable, meaning it won’t generate a tax refund if you owe less than the credit amount. However, you can roll over any unused credit to future tax years.
• There are no annual or lifetime dollar limits, so you can claim it every year you install eligible solar equipment until the program phases out.

How to Claim It

Claiming the Residential Clean Energy Credit is simple. Here’s how to meet all eligibility requirements:

• The credit applies to solar installed and in service during the tax year — not just purchased.
• Homeowners will need to file IRS Form 5695 (Residential Energy Credits) when submitting their tax return.
• While documentation isn’t required with your return, keeping receipts and installation records is highly recommended in case of an audit.

Not sure if your system qualifies? Solar Liberty’s experts can help confirm your eligibility and guide you through the process to maximize your savings.

State Solar Installation Incentives

In addition to federal tax credits, many states offer their own solar incentives to help homeowners save even more. While each state has different programs, one of the most notable is the New York State Solar Energy System Equipment Credit (Tax Code 606(g)). New York homeowners who install solar panels for their primary residence can claim 25% of their system costs (up to $5,000) as a state tax credit. This credit can be claimed alongside the federal incentive, allowing homeowners to stack their savings for maximum financial benefits.

To explore state-specific incentives in your area, check with your local government or speak with one of Solar Liberty’s specialists.

Save Even More With Net Metering

Another great way to maximize your solar savings is through net metering. This program allows solar panel owners to send excess energy back to the grid in exchange for credits on their electricity bills. When your panels produce more energy than you use, your utility company applies credits to your account — helping to offset future energy costs.

Net metering policies vary by state and utility provider. The best way to find out if you qualify is to contact your utility company or speak with Solar Liberty about available options in your area.

Apply for Solar Financing With Solar Liberty

Beyond tax credits and incentives, Solar Liberty makes it even easier to switch to solar with zero-down financing options. Our team will work with you to find a financing plan that fits your budget, so you can start saving with solar from day one. We’ve spent over 20 years helping customers harness the power of the sun to reduce their energy costs, lower their carbon footprint, and gain energy independence. With competitive pricing and top-rated customer service, you can trust that you’re getting the highest quality solar solution tailored to your needs.

Contact Solar Liberty today and let us guide you through your solar saving options!