Federal Solar Tax Credit for Homeowners is Ending

Homeowners still have time to claim one of the most valuable renewable energy incentives in the nation: the 30% Federal Solar Tax Credit, officially known as the Residential Clean Energy Credit. But the window is closing fast. The program is set to end on December 31, 2025, meaning new solar installations completed after this date will no longer qualify for the federal benefit.

According to EnergySage, the average cost of a home solar system in the U.S. is around $28,000, or about $2.50 per watt. Thanks to the tax credit, that total drops to roughly $19,400, saving homeowners close to $9,000. Missing out could make solar less financially attractive, especially in states that lack local incentives, where payback periods could stretch from seven years to over 15.

If you’re considering solar, acting before 2026 can mean the difference between major savings and higher upfront costs for years to come.

The 30% federal solar tax credit allows homeowners to deduct nearly one-third of the total cost of a new solar energy system from their federal income taxes. It covers equipment, labor, permits, and even solar batteries when installed as part of the system.

For example, if your solar project costs $25,000, you could receive a $7,500 tax credit when filing your federal return. The credit directly reduces what you owe in taxes rather than just lowering your taxable income.

There’s no maximum claim limit, which makes the incentive appealing for both small and large residential systems. It was designed to make renewable energy more accessible, helping homeowners reduce utility costs while increasing home value.

What’s the Takeaway: Installing solar before 2026 ensures you lock in the full 30% savings while it’s still available.

Solar installations often increase a home’s resale value while making it more appealing to buyers. According to studies from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory, solar-equipped homes can sell for 3–4% more on average than comparable properties without solar.

Buyers are attracted to the potential for long-term energy savings and independence from fluctuating utility rates. When combined with the federal tax credit, homeowners not only save upfront but can also recoup part of their investment when they sell.

However, full ownership of the solar system is key. Homes with leased solar panels may not receive the same resale boost since buyers often prefer systems they fully own.

What’s the Takeaway: A paid-off solar system adds tangible value to your property and can help your home sell faster in competitive markets.

No, there’s no income limit for the federal solar tax credit. Any homeowner who owns their system and has a federal tax liability can qualify.

Here’s how it works:

• You can claim 30% of eligible costs on your federal tax return.
• If your credit exceeds your owed taxes, the remainder can roll over to the next year.
• The credit applies only to systems you own—not leased or third-party-owned installations.

While the program is open to all income levels, homeowners who owe little or no federal taxes may not fully benefit. Speaking with a tax professional ensures you understand how much you can claim based on your personal situation.

What’s the Takeaway: Whether you earn $50,000 or $500,000, you can qualify for the 30% solar tax credit if you own your system and file correctly.

Claiming the solar tax credit is simple if you follow the right steps. Here’s what to do:

1. Install a qualifying system on your primary or secondary residence in the United States before January 1, 2026.
2. Keep detailed records including invoices, contracts, and proof of payment.
3. When filing your taxes, complete IRS Form 5695 and include the credit amount on your tax return.
4. If your credit is larger than your owed taxes, carry the balance forward to the next tax year.

Partnering with a reputable solar installer can make this process smoother. Many companies provide documentation and support to help homeowners ensure full compliance and maximize savings.

What’s the Takeaway: Don’t wait until the last minute. Schedule your installation early to secure your 2025 federal solar tax credit.

The federal solar tax credit has been one of the most impactful renewable energy programs in U.S. history. But its end date is fast approaching. Homeowners who act now can still take advantage of 30% savings, lock in lower utility bills, and increase their home’s value, all while supporting a cleaner energy future. Connect with SKR Solar now so you don’t miss out.