United States

How to claim the solar tax credit

Sourced facts on claiming and carrying forward the federal residential solar credit for systems installed before the 2025 repeal deadline hit.

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Can I still claim the federal solar credit?

Only if your installation was completed on or before December 31, 2025 — the credit doesn't apply to any expenditure made after that date, per the repeal in P.L. 119-21. If your installation qualifies, the claim mechanics below still apply.

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What determines whether my installation qualifies?

The completion date of the original installation, not the payment date. §25D(e)(8)(A) is explicit: an expenditure counts as made when installation is completed. The IRS confirms the consequence directly — if installation finished after 2025-12-31, the expenditure is treated as made after that date and the credit doesn't apply, even if you paid earlier.

What if my credit is bigger than what I owe in taxes?

It carries forward. The credit is nonrefundable — it can reduce your tax liability to zero but won't generate a refund beyond that — but any unused amount carries forward to future tax years indefinitely until fully used. CRS's own worked example: a $30,000 system generates a $9,000 credit (30%); if the taxpayer owes $7,000, liability goes to zero and $2,000 carries forward to the next year.

How common is it to need to carry the credit forward?

Fairly common. In tax year 2023, about 1.4 million taxpayers qualified for the credit — 46.5% used the entire credit that same year, 43.3% carried part of it forward, and 10.2% carried the entire amount forward. So more than half of qualifying taxpayers carried at least some credit into a later year.

Sources

4 cited

Repeal and qualifying date: Congressional Research Service, Insight IN12611, Expiration and Carryforward Rules for the Residential Clean Energy Credit, 2025-09-25 (checked 2026-08-18).
Expenditure-timing rule: IRS FAQ FS-2025-05, 2025-08-21 (checked 2026-08-18).
Carryforward mechanics and usage statistics: CRS Insight IN12611, 2025-09-25, citing preliminary IRS data (checked 2026-08-18).
Form reference: 2025 Instructions for Form 5695, page last reviewed/updated 2026-04-30 (checked 2026-08-18).

How it works

From “is it worth it?” to a number you can check

Start with your power bill

The kilowatt-hours you used over the last year is the number every honest quote is built from. Without it, any price is a guess.

See what the roof can actually make

Pitch, orientation and shade decide how much of that usage a system can realistically cover. This is the step door-to-door pitches skip.

Put the quotes on one basis

Cash, loan and lease are three different products. Compare system size and total price first, then compare the financing separately.

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How we work

What to expect from this site

Every figure here carries its source and the date it was checked.

Answer first, then the working

Each page opens by answering its own question in a couple of sentences, then shows the arithmetic underneath for anyone who wants to check it.

Ranges, not one confident number

Solar pricing moves with the roof, the state, the utility and the financing. A single national figure fits almost nobody, so we publish the spread our sources support.

We say when the maths does not work

A shaded roof on a low tariff can be a poor buy. That is a legitimate answer to the question and you will find it here rather than a reason to keep reading.

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Questions

Frequently asked

The questions homeowners actually ask before they sign anything.

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What form do I use to claim the credit?

Form 5695 is the form referenced in the sourced IRS instructions for residential energy credits. This brief doesn't have line-by-line guidance beyond that reference — check the current-year instructions directly for filing specifics.

My installation finished in January 2026 — can I claim anything?

No — the expenditure is treated as made when installation completes, and installations completing after December 31, 2025 don't qualify for the §25D credit under the repeal, regardless of when you paid.

How long can I carry forward unused credit?

Indefinitely, until the entire credit amount is used, per CRS's summary of the unchanged carryforward rule — there's no sourced expiration on the carryforward itself.

Is the credit a deduction or does it reduce my tax bill directly?

It's a credit, which reduces tax liability dollar-for-dollar (nonrefundable, so it can take liability to zero but not generate a refund beyond that) — a different, generally more valuable mechanism than a deduction, which only reduces taxable income.

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