Every tax season we hear some version of this from solar customers:
“So… where’s my government check?”
Fair question. If you installed solar or battery storage last year, you may be eligible for the 30% federal solar tax credit and that can have a real impact when you file your taxes. The catch is that it doesn’t work like a rebate and it doesn’t magically show up as a surprise check. It reduces your federal tax bill based on how much you owe and what you’ve already paid.
With the federal solar tax credit no longer available for new installations this year, we want to make sure customers who did qualify understand exactly how it works and what to expect at tax time.
To make this simple, we are using real numbers and the most common homeowner scenarios. If you installed solar or battery storage last year, this will help you walk into your tax appointment confident and informed.
Examples of how the solar tax credit works
Let’s break it down with three scenarios.
System cost/credit used in each scenario
System cost: $25,000
Federal tax credit at 30%: $7,500
Scenario #1: You owe more than the credit and already paid your taxes
Federal tax liability: $20,000
Taxes already paid through withholding: $20,000
The $7,500 credit reduces your tax liability to $12,500
Because you already paid $20,000, you overpaid by $7,500
The IRS refunds $7,500
Credit used this year: $7,500
Carryforward: $0
Scenario #2: You owe less than the credit​
Federal tax liability: $4,000
Taxes already paid through withholding: $4,000
The $7,500 credit reduces your tax liability to $0
The IRS refunds $4,000
$3,500 of the credit carries forward
Credit used this year: $4,000
Carryforward: $3,500
Scenario #3: You owe more than the credit and still owe after filing
Federal tax liability: $20,000
Taxes already paid through withholding: $10,000
The $7,500 credit reduces your tax liability to $12,500
You still owe $2,500 after filing
Credit used this year: $7,500
Carryforward: $0
Tax forms you may need
- Residential solar and/or battery storage systems:
- EV charging equipment:
- Commercial solar and/or battery storage systems:
Important note about manufacturer ID numbers
Some customers have asked about the “qualified manufacturer identification number” mentioned in recent IRS updates.
That requirement applies to the Energy Efficient Home Improvement Credit, not the residential solar and battery tax credit discussed in this guide.
If you installed solar or battery storage and are claiming the residential clean energy credit, you do not need a manufacturer identification number for your equipment.
As always, your tax professional can confirm what applies to your specific situation, and we are happy to provide any system documentation you may need.
