Federal Solar Tax Credit FAQ – 2024

If you installed solar in 2024, you may be eligible for the 30% Federal Solar Tax Credit—an incredible way to save on your investment in clean energy. However, with so much information out there, it’s easy to feel unsure about what qualifies and what doesn’t. We’ve compiled the most common questions about the solar tax credit, including misconceptions about roofing, how to claim the credit, and what you need to know about eligibility.
Let’s dive into the details to help you make the most of this valuable solar incentive!To claim the credit, you’ll need to:
⇨ Work with a tax professional to ensure accuracy.
⇨ Use IRS Form 5695 (Residential Energy Credits) to calculate your credit amount.
⇨ Submit the form along with your federal tax return.No, in most cases. This is one of the most common questions we hear, and here’s what the IRS says:
⇨ Traditional roofing materials and structural components (e.g., decking, rafters) do not qualify for the solar tax credit.
⇨ Solar roofing tiles or shingles that serve as both solar electric collectors and traditional roofing may qualify.
⇨ If you’re re-roofing your home before installing solar panels, those costs typically don’t apply to the solar tax credit.Yes, there’s a separate credit under the Nonbusiness Energy Property Credit, which provides a total combined limit of $500. This credit may apply to:
⇨ Metal roofs with pigmented coatings.
⇨ Asphalt roofs with cooling granules designed to reduce heat gain.
⇨ These roofs must meet Energy Star program requirements at the time of installation.Claiming expenses that don’t qualify may lead to issues during an audit. The IRS encourages taxpayers to follow the rules and provide accurate claims to avoid penalties.While we can’t provide tax advice, we always recommend working with a trusted tax professional who can help you navigate the process and ensure you claim the credit correctly.Yes, if the credit is larger than your federal tax liability, the unused portion can roll over to the following tax year. For instance, if your tax credit is $6,000 but you owe $4,000 in federal taxes, you can carry over the remaining $2,000 to the next year.Yes, the tax credit can be claimed for each new system you install. For example, if you install solar panels on both your primary and secondary homes, you can claim the credit for both systems.If you sell your home, you can still claim the tax credit if you paid for the system. However, the new homeowner cannot claim the credit since it is tied to the original installation.Yes, the ITC can be combined with state, local, or utility incentives. For instance, homeowners in Washington and Oregon can benefit from additional rebates and net metering policies, further reducing costs.If you’ve benefited from the solar tax credit, share your experience! A&R Solar offers a referral program:
You get $500 cash, and your friend gets $500 off when they go solar with us.