2019 is the last year for the 30% Energy Tax Credit (drops to 26% in 2020). Geothermal heat pumps, solar-electric, solar-water-heating, fuel cell, and small wind-energy property qualify for the tax credit. A taxpayer may claim the credit for qualified expenditures for a system that serves a dwelling unit located in the United States that is owned (and used as a residence fuel cell property only) by the taxpayer.

The date the installation is completed is the date that determines the tax credit. Or for a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home.

If the federal tax credit exceeds your tax liability, the excess amount may be carried forward to your next year’s tax return.

Three Tips for Solar Shoppers

  1. Get multiple quotes
  2. Try to find the smaller contractors that typically offer lower prices
  3. Compare all your equipment options

You are eligible for the Federal ITC only if you OWN your solar energy system, rather than lease it.

You claim the energy tax credit on your federal tax return. Remember to let your tax preparer know you’ve purchased energy credit property