Have you heard about solar tax credits? Are you interested in learning more about solar tax credits, and how they can help pay for your solar photovoltaic or solar heating system?

Solar tax credits are one of the most popular, and widespread, solar incentives in the United States. Most states, as well as the federal government, offer incredible solar tax credits. Most solar tax credits range from 20% up to 30-35% of the overall initial cost of your solar electric or solar hot water system.

What exactly are solar tax credits? Solar tax credits are actually income tax credits, or income tax write-offs, similar to some business and cost-of-living expenses. In other words, they reduce the overall amount of taxes you are required to pay. This leads to a higher tax refund or a lower tax due at the end of the year.

Who can use solar tax credits? Most states' solar tax credits, and the solar tax credits from the federal government, apply to both residential and commercial customers. Sometimes there are different regulations, or solar tax credit amounts for different types of customers. You view your states' solar incentives to see the specific regulations and amounts for solar tax credits in your state.

What types of solar systems are solar tax credits available for? Typically, solar tax credits are available for both solar photovoltaic (solar electric) and solar thermal (solar hot water and solar heating) systems. However, because of the vastly different prices of these solar systems, there is often a difference in the percentage, or overall amount, of the solar tax credits available for each. Again, check out your states' solar incentives to see the specifics of the solar tax credits you are eligible for.

What costs are covered by solar tax credits? Typically, solar tax credits cover all costs associated with the purchase and the installation of your solar electric or solar heating system. Some states vary as far as coverage, and you should see your states' specific solar tax credits information page to learn more. However, it is common for solar tax credits to cover the costs of solar collectors, balance of system components, shipping to the installation site, and installation costs. Sometimes, the costs of feasibility studies and site evaluations are covered as well.

What are the current federal solar tax credits? The federal government has two different solar tax credits; one for commercial solar customers and one for residential solar customers. Within those two solar tax credits, their are varying amounts for solar photovoltaic systems and solar thermal systems. See the specifics of the federal solar tax credits below:

• Federal Commercial Solar Tax Credits:
  • Solar photovoltaics (solar electric): 30%, uncapped solar tax credit
  • Solar thermal (solar heating): 30%, uncapped solar tax credit
• Federal Residential Solar Tax Credits:
  • Solar photovoltaics (solar electric): 30%, uncapped solar tax credit
  • Solar thermal (solar heating): 30% solar tax credit with $3,000 cap

To learn more about Federal Solar Tax Credits, please view our Federal Solar Incentives Page.

What are the solar tax credits available in my state? The solar tax credits amounts and regulations vary from state to state, and some states do not offer solar tax credits. If you would like to find out more about the solar tax credits offered by your state, review the list of solar incentives for your state by choosing your state from the menu at the top of this page.

Solar tax credits are a great way to cut the cost of your solar electric or solar thermal system, and in some cases, combined federal solar tax credits and state solar tax credits can offset 50%, or more, of the total cost of your solar system.