What to Know About the Federal Solar Tax Credit (ITC)

How the ITC has historically worked

The Investment Tax Credit is a federal tax credit, not a rebate or a check in the mail. Historically, it allowed eligible homeowners to claim a portion of the cost of a qualifying solar system against their federal income tax liability for the year the system was placed in service.

Because it is a credit rather than a deduction, it has historically reduced what you owe in taxes dollar for dollar, up to the value of the credit. That structure is part of why it carried so much weight in solar payback calculations over the past decade.

Why the credit's status has changed

Here is the critical part: the federal residential solar tax-credit landscape has changed, and the residential credit may no longer be available for 2026. The percentage that applied in past years should not be assumed to apply to a system you install now.

Federal incentive programs are set by law, and that law can be amended, allowed to expire, or restructured. What was true a few years ago is not automatically true today, which is exactly why we avoid quoting a specific current percentage as fact.

What to verify before you buy

Rather than relying on an outdated figure or a sales pitch, confirm the current rules for your situation before you commit to a purchase. A few things worth checking:

• Whether a federal residential solar credit currently exists and at what value, under the law in effect when your system is placed in service.
• Whether your specific situation and tax liability would let you actually use such a credit if it exists.
• What state and utility incentives may be available, since these are separate from any federal credit and have their own rules.
• The timing requirements, since credits typically depend on when a system is placed in service rather than when it is ordered.

Talk to a licensed tax professional

We are solar professionals, not tax advisors, and the same is true of any reputable installer. The only way to know what tax benefit, if any, you can claim is to consult a licensed tax professional who can review your specific circumstances and the current law.

At Zenergy Solar we are happy to explain how incentives have historically factored into solar decisions and to point you toward the programs that may apply in your area, but we always recommend verifying eligibility and amounts with a qualified professional before counting on them. The honest answer is that incentives change, so confirm before you buy rather than assume.