The Complete Federal Solar Tax Credit Guide

The governments today are doing their best to encourage homeowners to make a switch to solar energy. With the many benefits that solar energy provides, it is hard to not make the switch. Solar energy is a renewable resource, meaning it will never run out. It is also environmentally friendly because it does not produce emissions as fossil fuels do. One incentive the US federal government is providing is the Solar Tax Credit. The program offers a tax credit of 30% for homeowners and businesses who install solar panels.

How Does a Federal Tax Credit Work for Solar?

When you buy a solar panel system, you can receive a federal tax credit equal to 30% of the cost of the system. The credit is applied to your tax bill, and if it exceeds the amount you owe, you can carry the credit over to future tax years. There is no maximum limit on the credit, so if you have a large solar system, you could receive a substantial tax credit.

The credit is available for both residential and commercial solar systems, and it can be applied to both new and existing systems. However, if you lease a solar system, the credit goes to the owner of the system, not the lessee. To receive the credit, you must file IRS Form 5695 with your tax return. You’ll need to provide information about the system, such as its cost, capacity, and location.

The solar tax credit is scheduled to remain in effect through 2033. After that, it will gradually decrease, until it expires completely in 2035 or Congress decides to extend it.

If you’re thinking about going solar, the federal tax credit can be a great incentive. It can save you thousands of dollars on your solar system, and it’s a good way to reduce your carbon footprint.

We at Greater Texas Solar are the leading company when it comes to solar panel system installation in Texas. Our professionals believe that solar energy is the future, and we are committed to helping our customers save money and live more sustainable lives.

As the leading solar company in Texas, we offer a variety of solar panel system options to suit your needs, and our experienced team will work with you to ensure that your system is installed properly and that you are getting the most out of your investment.

We can help you claim your federal tax credit in Texas. Send us a message today.


What Items Qualify for Solar Tax Credit?

The ITC is a dollar-for-dollar tax credit, meaning that it reduces your tax bill by 30% of the cost of your solar system. So, if your system cost $10,000, you would save $3,000 on your taxes. The ITC can be applied to only the purchase of a solar system and not if you lease it.

Here are the items that usually qualify for a solar tax credit.

Solar Panels

In a solar energy system, solar panels are the most important component. The panels collect sunlight and convert it into electricity. Solar panels are made up of many individual solar cells. These cells are connected to form a panel. The more cells a panel has, the more electricity it can produce.

Solar panels are usually mounted on the roof of a house or building. They can also be mounted on the ground. Solar panels must be placed in an area where they will get plenty of sunlight. If they are not, they will not produce enough electricity to power the home or building.

Solar Batteries

Batteries are used to store the electricity generated by solar panels. Batteries are available in a variety of sizes and types. There are two main types of batteries, lead-acid and lithium-ion. Lead-acid batteries have been around for many years and are the most common type of battery used in solar systems. Lithium-ion batteries are newer and more expensive, but they have several advantages over lead-acid batteries.

Labor cost

The cost of labor to install a solar system is known as the direct labor cost. On average the cost is typically between $2,000 and $4,000, making it a significant expense for most homeowners. However, the good news is that this cost is eligible for a tax credit, allowing homeowners to recoup some of the costs associated with installing a solar system.

Cost of Equipment Involved

You can claim the federal solar tax credit on the cost of the equipment involved such as inverters, mounting brackets, and wiring. Since all of these items are necessary for the installation of a solar panel system, the tax credit can help offset the cost of the equipment.

The solar tax credit is a great way to save money on your taxes and help the environment. To qualify for the solar tax credit, your system must be installed by a certified installer, and it must meet certain energy efficiency standards. By knowing what qualifies, you can make sure that you are getting the most out of your solar tax credit.


Will I Get Solar Tax Credit If I am not connected to the Electric Grid?

If you’re considering going solar, you may be wondering if you’ll still be eligible for the federal solar tax credit if your system isn’t connected to the electric grid. The answer is yes! As long as

your solar PV system is generating electricity for use at your residence, you’ll be able to claim the residential solar tax credit.

Going solar can help you save money on your energy bills, and the federal solar tax credit can help offset the initial cost of installing a solar PV system. So, if you’re not connected to the electric grid, there’s no need to worry – you can still take advantage of this great opportunity to go solar and save!

At Greater Texas Solar, we understand how going solar can help homeowners and businesses save money. For this reason, we do everything possible to provide you with a system that ensures maximum savings. We also have a team of experts who will work with you to figure out the best way to install solar panels on-premises.

Avail the solar tax credit incentive today in Texas! Send us a message and one of our representatives will be in touch with you shortly.

Am I eligible for a federal solar
tax credit in 2023?

If you meet the following criteria, then yes you are eligible for a solar tax credit in 2023

  • Your solar PV system needs to be new or used for the first time to qualify for the credit.
  • Your solar panel must be installed at your primary or secondary residence. The credit is only available for the purchase and installation of the solar panel and is not available for leased or rented panels. Or, You may have purchased an interest in an off-site community solar project, as long as the electricity generated is credited against it, and does not exceed your home’s electricity consumption.
  • The system must be placed in service between January 1, 2017, and December 31, 2034.
  • To qualify for the federal solar tax credit, you must have a taxable income, meaning that your income must be above the standard deduction for your filing status.
  • The solar PV system must be placed in service at a residence located in the United States to qualify for the credit.

The solar tax credit is a great way to save money on your taxes and help the environment. To be eligible, you must have a solar system installed in your home or business and meet the other requirements listed above.


How do I claim the solar tax credit if I am eligible?

To claim the solar tax credit, you will need to file a federal tax return and include IRS Form 5695, the Solar Energy Systems Credit form. The credit is available for both residential and commercial solar installations, but can only be applied to new systems.

You will need to provide your name, address, and Social Security number, as well as the date and location of the solar energy system installation. You will also need to provide a description of the system, including the number of panels and the estimated annual energy output.

Solar panel installation has become increasingly popular in recent years, as the technology has become more affordable and efficient. The federal solar tax credit can further offset the cost of installation, making going solar an even more attractive option for property owners.

If you are planning on installing solar panels, now is the time to do it. The solar tax credit is a great way to save money on your installation, and it is only available for a limited time.

Are there tax credits for solar batteries?

Yes, there are federal tax credits available for solar batteries that are connected to a solar system, as well as standalone batteries starting from 2023. The credit is equal to 30% of the cost of the system, with no upper limit. This means that if you have a $5,000 solar battery system installed, you will receive a $1,500 tax credit. The credit is set to expire at the end of 2035, so now is the time to take advantage of it if you are considering installing solar batteries.

We at Greater Texas Solar provide residential and commercial solar panel installation services and have been in business for years. Our goal is to provide our customers with the best possible service and experience when it comes to solar panel installation.

We are a highly experienced and reputable company that takes pride in our work. We also provide you with a free estimate of the cost of your project, so you can make an informed decision about whether solar is right for you.

Contact us today to learn more about how we can help you take advantage of the solar tax credit.

What if I’m getting a tax refund from IRS after the solar tax credit?

The IRS offers a tax credit for solar energy systems that will reduce your federal income tax. The credit is nonrefundable, which means that it can only be used to offset your tax liability even if you are getting a refund for the tax year. However, the credit can be carried over to the next tax year, so if you do not use it all in the year you purchase your system, you can use it in future years.

Are all types of solar backup battery storage eligible for tax credits?

Yes, all types of solar backup battery storage are eligible for tax credits. It doesn’t matter if you are using a lead acid battery, a lithium-ion battery, or any other type of battery. As long as the battery is used for solar backup storage, it is eligible for tax credit. However, it is only available on new battery installations.


The federal solar tax credit is a great way to save money on your solar panel installation. It can save you up to 30% of the cost of your system, making it a very attractive option for those looking to go solar. However, there are a few things to keep in mind when considering the solar tax credit, such as the type of system you install and the state you live in. Be sure to consult with a solar installation company or tax professional to make sure you qualify for the solar tax credit and to learn more about how it can save you money.

At Great Texas Solar, we are the leading company in Texas providing solar panel installation services. Our professionals have years of experience installing solar panels for home and businesses, and they’re passionate about what they do.

If you’re ready to go solar, give us a call today. We’re looking forward to helping you save money and power up your home with clean, renewable energy.