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What is ITC and how does it work?

ITC could help you financially if you are installing solar panels.

worker installing solar panels

It could influence the cost of your federal tax bill.

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Investment tax credit

ITC stands for investment tax credit. It is also commonly known as the federal solar tax credit . This grants people in the United States the opportunity to deduct 26% of the cost of installing sonar energy in their homes from their federal tax bill. Find additional details here.

There is no cap on the value you can claim with ITC. This credit saves customers abut $9,000 on average.

As long as you are the owner of your solar energy system, you can receive ITC. If you do not have enough tax liability to get the full savings, you can roll over the credit.

If you sign a lease or power purchase agreement (PPA) with the solar installer, the you are not the owner of the solar energy system. This means that you are not eligible to get ITC.

There is also no income limit with this credit, so anyone is eligible.


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Federal solar tax credit eligibility

In order to qualify, your energy system must have been installed between January 1, 2006 and December 31, 2023.

The install also must be on your primary or secondary residence in the United States.  If there is an off-site community soar project, the electricity generated is credited against the electricity consumption in your home.


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