Solar Panel Investment Requirements

Do solar panels qualify for a tax credit?

Under the new tax credit timeline, solar panel systems installed by December 31, 2025, will still qualify for the full 30% credit. But systems installed after that date wouldn’t qualify for any tax credit at all. The federal solar tax credit is valuable because it's a dollar-for-dollar reduction of your federal tax bill.

Do you have to own a solar system to get tax credit?

You must own your solar energy system to take advantage of the ITC—if you signed a solar lease or PPA, you aren't eligible for the 30% tax credit. Homeowners who want to claim the tax credit before it expires should get quotes now. What is the federal solar investment tax credit?

Will solar panels be tax deductible in 2025?

In 2025, the federal Investment Tax Credit (ITC) allows homeowners to claim 30% of their solar panel system costs as a tax credit on their federal taxes. Starting January 1, 2026, the residential solar tax credit will disappear completely.

How does the solar investment tax credit work?

The Investment Tax Credit (ITC) is currently a 30 percent federal tax credit claimed against the tax liability of residential (under Section 25D) and commercial and utility (under Section 48) investors in solar energy property.

Are solar panels tax deductible?

Readers interested in installing solar products should use their best judgment and seek advice from a licensed tax professional. In 2025, the federal Investment Tax Credit (ITC) allows homeowners to claim 30% of their solar panel system costs as a tax credit on their federal taxes.

Can you buy a solar energy system with a mortgage?

New homeowners can add solar as part of their mortgage with loans available through the Federal Housing Administration , which allow borrowers to include financing for home improvements in the home’s purchase price. Buying a solar energy system makes you eligible for the Solar Investment Tax Credit, or ITC.