Solar Investment Tax Credit (ITC)

The Investment Tax Credit, commonly known as the ITC or the Federal Solar Tax Credit, allows commercial solar owners to deduct a portion of their solar installation costs from their federal taxes. Depending on your federal tax liability, the ITC can be taken in one fiscal year, or over the course of several years. The ITC is not a tax rebate, but rather a dollar-for-dollar reduction in taxes paid to the IRS. Originally established in 2005 to help promote a transition towards renewable energy, the ITC was first set to expire in 2007. The solar tax credit is currently at 30% for commercial systems, however due to the passage of the “One Big Beautiful Bill Act”, signed into law on July 4, 2025, this tax credit will expire on December 31, 2027. 

Unfortunately the “One Big Beautiful Bill Act” also officially eliminated the 30% Federal Income Tax Credit on Residential Solar at the end of 2025, therefore this tax credit is no longer available to homeowners who install solar on their residence.