The solar tax credit reduces your tax liability but does not provide a direct cash refund. If you invest in renewable energy for your home such as solar, wind, geothermal, fuel cells or battery storage technology, you may qualify for an annual residential clean energy tax credit. The Residential Clean Energy Credit equals 30% of the costs of new, qualified clean energy property for your. You claim the solar tax credit by filing IRS Form 5695 with your federal tax return, allowing you to deduct 30% of your solar installation costs directly from your tax bill. 30 % through 2032: The credit stays at 30 % of qualified costs until December 31 2032, then steps down to 26 % in 2033 and 22 % in 2034. Senate passed legislation in July 2025 that would terminate the 30% residential solar tax credit at the end of 2025, rather than the original 2034 timeline, creating immediate urgency for homeowners considering solar installations.
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