I installed solar panels on my home in 2025. How do I claim the 30% federal tax credit?

If you installed solar panels or other qualifying clean energy systems on your primary or secondary residence in 2025, you are eligible for the Residential Clean Energy Credit — worth 30% of the total installed cost with no dollar cap. This credit is claimed on IRS Form 5695 and flows to Schedule 3 (Form 1040).

### What Qualifies for the 30% Credit

The Residential Clean Energy Credit covers:

• Solar electric (photovoltaic) panels — the most common
• Solar water heaters (must be certified by the Solar Rating Certification Corporation or equivalent)
• Wind turbines for residential electricity generation
• Geothermal heat pumps (must meet Energy Star requirements)
• Battery storage (must have capacity of at least 3 kilowatt-hours, even if not paired with solar)
• Fuel cell systems (limited to $500 per half-kilowatt of capacity)

The credit covers the full installed cost, including equipment, labor, wiring, and permitting. It does not have an annual cap — if your solar system cost $30,000, your credit is $9,000.

### How Long Does the 30% Rate Last?

The Inflation Reduction Act locked the 30% rate through 2032. It is not affected by the OBBBA. Starting in 2033, the rate steps down to 26%, then 22% in 2034, and expires after that unless extended by Congress.

### Is This a Refundable Credit?

No — the Residential Clean Energy Credit is nonrefundable, meaning it can reduce your tax liability to $0, but you will not receive the excess as a refund. However, unused credits can be carried forward to future tax years until they are fully used. This is important if your installation cost produces a credit larger than your current year tax liability.

### How to Claim It: Form 5695

• Complete Part I of Form 5695. Enter the cost of your qualifying clean energy property. Multiply by 30% to get your tentative credit.
• Transfer to Schedule 3. The credit from Form 5695, line 15 goes to Schedule 3 (Form 1040), line 5a.
• Keep your documentation. Save your installer's invoice, any manufacturer certifications, and proof of payment. The IRS may ask for these.

### Separate Credit: Energy Efficient Home Improvement Credit

There is also a separate Energy Efficient Home Improvement Credit (Part II of Form 5695) for items like:

• Heat pumps and heat pump water heaters
• Exterior windows, doors, and skylights
• Insulation and air sealing
• Home energy audits

This credit is capped at $3,200 per year ($1,200 for non-heat-pump improvements, $2,000 for heat pumps). Unlike the Residential Clean Energy Credit, the $3,200 cap resets each year — but unused amounts cannot be carried forward.

### Example

If your tax liability for 2025 is $10,000, you'd eliminate it entirely and carry forward $5,150 to apply against future years' tax bills.

### State Credits May Also Apply

Many states offer additional solar incentives (rebates, state tax credits, property tax exemptions, net metering) on top of the federal credit. Check your state's energy office for current programs.