Solar Tax Credit Calculator
Calculate your 30% federal solar investment tax credit and long-term savings
How to Use This Calculator
This calculator helps you estimate your federal solar Investment Tax Credit (ITC), project long-term savings, and compare buying vs leasing. Choose a tab based on your question:
- Credit Amount — Enter your system cost and battery storage to see your exact federal tax credit under current ITC rates.
- 25-Year Savings — See how much you'll save over the lifetime of your system, accounting for rising electricity prices and your net cost after the tax credit.
- Buy vs Lease — Compare the total cost, ownership benefits, and net savings of buying outright vs leasing your solar system.
All calculations update instantly as you change inputs. Share your results with a unique URL or copy them to your clipboard.
2026 Solar ITC Rules
The federal solar Investment Tax Credit (ITC) was extended and expanded by the Inflation Reduction Act of 2022 (IRC Section 48). Here is the current rate schedule:
| Installation Year | ITC Rate | Notes |
|---|---|---|
| 2022 – 2032 | 30% | Current rate (IRA extension) |
| 2033 | 26% | Step-down begins |
| 2034 | 22% | Final residential year (unless extended) |
| 2035+ | 0% | Residential credit expires (commercial may continue) |
Eligible costs: Solar panels, inverters, mounting hardware, wiring, installation labor, permitting, battery storage, and energy monitoring systems.
Worked Example
Step 1 — Total eligible cost:
$25,000 (panels + installation) + $10,000 (battery) = $35,000
Step 2 — Calculate ITC (30% for 2026):
$35,000 × 30% = $10,500 federal tax credit
Step 3 — Net cost:
$35,000 − $10,500 = $24,500 out-of-pocket after credit
Step 4 — 25-year savings (assuming $150/mo bill, 3% inflation):
Year 1 savings: $1,800 | Year 10: $2,348 | Year 25: $3,654
Total 25-year electricity savings: ~$65,400
Net benefit: $65,400 − $24,500 = $40,900 net benefit
Payback period: approximately 11 years. Everything after that is pure savings.
Frequently Asked Questions
Can I claim the solar tax credit if I finance the system with a loan?
Yes. You can claim the full ITC regardless of whether you pay cash or finance with a solar loan. The credit is based on the total system cost, not how you pay for it. However, you cannot claim the credit if you lease the system -- the leasing company claims it instead.
What if my tax liability is less than the credit amount?
The solar ITC is non-refundable, meaning it can only reduce your tax bill to $0 -- it won't generate a refund. However, any unused credit carries forward to future tax years. For example, if you owe $5,000 in federal taxes and have a $7,500 credit, you pay $0 this year and carry $2,500 forward to next year.
Does the credit apply to a second home or vacation property?
Yes, the residential solar ITC applies to both primary and secondary residences that you own. It does not apply to rental properties (though commercial ITC rules may apply). The system must be new -- used or previously installed equipment does not qualify.
Can I add battery storage later and still get the credit?
Yes. Since 2023, standalone battery storage qualifies for the ITC under the Inflation Reduction Act. You can add a battery to an existing solar system and claim the credit on the battery cost alone. The battery must have a capacity of at least 3 kWh.
Are there state solar incentives in addition to the federal credit?
Many states offer additional incentives including Solar Renewable Energy Credits (SRECs), property tax exemptions, sales tax exemptions, and cash rebates. These stack on top of the federal ITC. Check the DSIRE database (dsireusa.org) for incentives in your state. Some states like New York, Massachusetts, and New Jersey have particularly generous programs.
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