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Incentives

The Complete Guide to the Federal Solar Tax Credit (ITC)

·6 min read

The federal Investment Tax Credit (ITC) was one of the most important financial incentives for going solar. Here's everything you need to know.

ITC Status: Expired

The federal residential solar tax credit (Section 25D) expired on December 31, 2025 following the One Big Beautiful Bill Act (OBBBA), which accelerated the phase-out. No federal residential tax credit is available for 2026 installations.

What's Covered

The ITC covers solar panels, inverters, mounting equipment, wiring, battery storage (if installed with solar), and labor costs for installation.

How to Claim

You claim the ITC when you file your federal taxes using Form 5695. The credit reduces your tax liability dollar for dollar.

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Written & reviewed by

Jeremy Wolfe — Senior Solar Energy Analyst

Jeremy Wolfe is a solar energy analyst specializing in residential photovoltaic economics, federal and state incentive policy, and return-on-investment modeling for homeowners. He leads EnergyTools' solar research program and methodology.

  • 10+ years analyzing residential solar economics and payback modeling
  • Lead researcher for EnergyTools' 50-state solar cost-per-watt database
  • Author of 100+ solar ROI, payback, and incentive analyses

Methodology & data sources:NREL PVWatts, EPA FuelEconomy.gov, state utility commissions— updated 2026.