The Homeowner’s Guide To Solar Tax Credits and Incentives

2021 Federal Solar Tax Credit

How Big a Tax Credit Can I Get for Going Solar?

How many home improvements can you name where someone else will essentially refund up to one-quarter of the total cost of the equipment for you – including the cost of installation – at the end of the year? Not many, I bet.

But that’s the case right now with installing a solar system on your home. You may be able to claim the current Federal residential energy tax credit of up to 26% of the cost of energy-saving improvements to your home on your taxes for 2021! 1

Unfortunately, this is a tax credit that is scheduled to expire. As the chart below illustrates, this solar tax credit will continue at the 26% level only through the end of next year. Thereafter it plummets, and disappears entirely in 2024.

Solar Tax Credit 2021

The takeaway from this is clear: It’s time to start making some decisions about going solar while the Federal tax credit is still on the table.

And the best way to get you started is by sharing all we know about the solar tax credits you may qualify for if you choose to go solar. 4

What Is the Federal Solar Tax Credit?

The current Federal laws regarding solar tax credits are extensions of previous laws. Initially, funds from the Energy Policy Act of 2005 were for investments in renewable energy. Over time, residential tax credits have been added for homeowners who install energy-efficient property as well.

The Federal residential solar energy tax credit currently allows you to deduct from your Federal taxes 26% of the total cost of a home photovoltaic system, including installation, that is installed before the end of 2022. The system must be placed in service during the tax year and generate electricity for a home located in the United States.

Remember, however, that if you sign a lease or PPA with a solar installer, you are not the owner of the system, and thus you cannot receive the tax credit.

How Does the Federal Solar Tax Credit Work?

The Federal tax credit for solar is one of the most important Federal policies in support of the growth of solar energy in the United States. The Solar Energy Industry Association (SEIA) estimates that solar power usage has increased 52% annually since the inception of this tax credit!

The history of the solar tax credit

Your home solar panel system must be completely installed (placed in service) before December 31, 2021, to claim up to a 26% credit on your 2021 Federal taxes. The same deadline and credit will be in effect in 2022. But the credit will decrease to 22% for solar systems installed in 2023 and sadly will be removed for systems installed after Jan 1, 2024.

An unusual feature of these credits is that there is no maximum amount that can be claimed, as long as it keeps to no more than 26% of your total costs for the alternative energy equipment, including installation. That’s a good thing.

Do Solar Batteries Qualify for a Tax Credit?

The answer is yes. You may also be able to get tax credit for energy storage systems such as home backup batteries, depending on who owns the battery and how the battery is used. If your home solar storage system is owned directly by a public entity, such as your local utility, you will not be able to claim any tax incentive. If you, as the homeowner, own it yourself, and the battery is charged by your home solar panels, your battery system may be eligible for the Federal solar tax credit.

How Do I Qualify for the Federal Solar Tax Credit?

To qualify for the Federal solar tax credit, you must meet all of the following requirements:

    You must own your home.

    Your Federal Tax liability must be sufficient to apply for the 26% tax credit.

    You must own your solar panels. The Federal income tax credit is only available to you if you purchase the system.

So, How Do I Claim the Federal Solar Tax Credit?

Solar Tax Credit 2021

Simple. You claim the Federal tax credit for solar when you file your yearly Federal income tax return. Well, actually, it’s only sort of simple…

Seek professional tax advice first of all, to ensure that you are eligible for the credit. Then complete IRS Form 5695 “Residential Energy Credits” and include the final results of that form on your IRS Schedule3/Form 1040. Don’t forget to attach Form 5695 to your Federal tax return. Instructions on filling out Form 5695 are available at http://www.irs.gov/pub/irs-pdf/i5695.pdf.1 2

What About State Solar Tax Credits and Rebates?

Some states offer additional tax incentives for installing a solar panel system. With a state solar tax credit, you can deduct a portion of the cost of your solar panel system from your state tax bill, similar to how it works with the Federal tax credits.

These credits vary significantly by state, but your Sunnova dealer will be totally up-to-date on your local incentives and can steer you in the right direction.1

Click on the map below to see what solar credits or incentives your state may offer.

Pennsylvania

Pennsylvania Solar Tax Credit

Federal Tax Credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Maryland

Maryland Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State Incentives (only for loan products)

  • You may be eligible to earn $1000 rebate check for a PV solar system sized between 1- 20kW.
  • You may be eligible to claim up to 30% of your battery storage costs, up to $5,000, on state income taxes.
  • Earn one Solar Renewable Energy Credit (SREC) for every 1,000 kWh (1.0 Mwh) your solar system produces. The value of the credits can increase or decrease depending upon the SREC market value. You can sell your Certificates directly or with a third-party broker specialized in SRECs.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

New Mexico

New Mexico Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

New Hampshire

New Hampshire Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State Incentives (only for loan products)

  • You may be eligible for a rebate program of $0.20 per watt up to $1,000, or 30% of the cost of the system for solar systems under 10 kilowatts (kW), whichever is less.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – "According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Colorado

Colorado Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Texas

Texas Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

Utility and City incentives (only for loan products)

  • Austin Energy – you may be eligible to earn $2,500 rebate by completing their solar education course and installing a qualifying solar photovoltaic (PV) system on your home.
  • CoServ Electric Cooperative – you may be eligible to earn isolar rebates on qualified purchases based on kW installed, up to a maximum of $3,100 per residential Member.
  • CPS Energy in San Antonio – you may be eligible to earn a rebate incentive of $2,500 for qualifying residential project.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Connecticut

Connecticut Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Massachusetts

Massachusetts Solar Tax Credits

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Hawaii

Hawaii Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State Incentives (only for loan products)

  • May be eligible to claim up to 25% of solar panel costs, up to $1,000, on state income taxes.

 



  • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
  • Statewide rising utility rates –“According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
  • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
  • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker


    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Arizona

Arizona Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State Incentives (only for loan products)

  • May be eligible to claim up to 25% of solar panel costs, up to $1,000, on state income taxes.

 

Utility Incentives (only mention for loan products)

  • SRP Utility Customers – you may be eligible to earn a battery storage incentive in the amount of $300 per kWh-DC, up to $3600, when purchasing a battery and agreeing to participate in the utility’s battery research study.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

California

California Solar Tax Credit

Federal Tax Credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State Incentives (only for loan products)

  • California Self Generating Incentive Program (SGIP) – Depending on the current step, you may be eligible to receive approximately $250/kilowatt-hour, which means the rebate covers approximately 25 percent of the cost of an average energy storage system.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

South Carolina

South Carolina Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Florida

Florida Solar Tax Credit

Federal Tax Credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– Note: if you can not add the disclaimer, please use the following language “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Illinois

Illinois Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– Note: if you can not add the disclaimer, please use the following language “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

New Jersey

New Jersey Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State incentive (only for loan products)

  • Earn 60% of one Transition Renewable Energy Credit (TREC) for every 1,000 kWh (1.0 Mwh) your solar system produces. You can sell your TRECs directly to a TREC administrator.
  •  



    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

New York

New York Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State incentive (only for loan products)

  • You may be eligible for a solar energy system equipment credit up to 25% of the qualified solar system equipment expenditure, up to $5,000, on state income taxes.
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    • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
    • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
    • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
    • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Rhode Island

Rhode Island Solar Tax Credit

Federal tax credit (only for loan products)

  • May be eligible to claim some of the system’s cost as a credit on your federal taxes.

 

State incentive (only for loan products)

  • With the Renewable Energy Fund, Small-Scale Program, you may be eligible to receive $0.85/W incentive when installing a solar system, up to $7,000 per project.

 



  • Federal tax credit o You may be eligible for a federal tax credit with the purchase of a solar system and/or battery. To qualify for the tax credit, you must have federal income tax liability at least equal to the value of the tax credit. Additional tax credits may also be available for homeowners in certain states. Tax incentives are subject to change or termination by executive, legislative or regulatory action. Sunnova makes no guarantees regarding eligibility of any of the solar system and/or battery’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
  • Statewide rising utility rates – “According to EIA’s state-by-state analysis” o EIA’s state-by-state CAGR Analysis shows an increase in residential electricity rates across all US States since 1990. To see the CAGR Analysis for your state go to EIA Sales and Revenue (1990- Current) – https://www.eia.gov/electricity/data/eia861m/
  • 2017 Power outage data– “According to 2017 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2017 - https://switchon.eaton.com/plug/blackout-tracker
  • 2008-2017 Power outage data – “According to 2018 Easton Blackout report” o The area of each outage and number of customers affected varied per outage. Source: Eaton Blackout Tracker: United States Annual Report 2018 - https://switchon.eaton.com/plug/blackout-tracker

Washington D.C.

District of Columbia Solar Tax Credit

...And those State and Local Rebates?

It is sometimes possible to receive a cash rebate from your state, municipality, utility company, or other organization that wants to promote solar energy. Rebates are generally available for a limited time and end once a certain amount of solar has been installed in the community. Rebates can help to further reduce your system costs by 10% to 20%.

Solar Renewable Energy Certificates (SRECs)

Some states require utilities to generate a certain percentage of their electricity from solar power. If you live in one of these states, your solar power system will generate Solar Renewable Energy Certificates (SRECs) based on the amount of electricity produced by your solar panels. Utilities may have programs under which they may buy your SRECs so that they can count your solar power toward their requirements. Some states and utilities offer Performance-Based Incentives (PBIs), which pay solar-powered homeowners a per-kilowatt-hour credit for the electricity the systems they own produce. Certain PBI programs require that you install equipment manufactured in your state to qualify. Unlike SRECs, PBIs don’t have to be sold through a market, and incentive rates are determined when the system is installed. PBIs may replace or exist alongside net metering policies.

Now, back to those Federal tax credits again.

What Expenses Are Included When I Apply for My Federal Solar Tax Credit?

All of the costs listed here may be included on your IRS Form 5695. Your Sunnova dealer can help you by itemizing them for you. 3

  • Solar PV panels or PV cells used to power an attic fan (but not the fan itself)
  • Contractor labor costs for onsite preparation, assembly or original installation, including permitting fees, inspection costs and developer fees
  • Balance-of-system equipment, including wiring, inverters and mounting equipment
  • Energy storage devices that are charged exclusively by the associated solar PV panels, even if the storage is placed in service in a subsequent tax year (however, the energy storage devices are still subject to the installation-date requirements)
  • Sales taxes on eligible expenses

Am I Eligible to Claim the Federal Solar Tax Credit in 2021?

  • You might be eligible for this tax credit this year if you meet all of the following criteria: 3
  • Your solar PV system was placed in service after 12/31/2019 and before 01/01/2023.
  • The solar PV system is located at your primary or secondary residence in the United States, or for an off-site community solar project, if the electricity generated is credited against, and does not exceed, your home’s electricity consumption.
  • You own the solar PV system (i.e., you purchased it with cash or through financing).
  • The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment.

Can I Claim the Tax Credit More than Once?

Anyone who pays for a solar panel installation on their home can claim the solar tax credit as long as they have tax liability in the year of installation. If you don’t have enough tax liability to claim the entire credit in one year, you can carry any leftover amount forward to the next year as long as the tax credit is still in effect.

Check out the U.S. DOE’s own publication, the Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics.

So What Am I Waiting For?

The phrase “there’s no time like the present” certainly applies here.

At Sunnova, we are prepared to help you with not just the scientific and mechanical aspects of powering your home with clean, renewable solar energy, we hope the information we’ve presented here will help you understand how to qualify for all of the financial benefits you are entitled to. 1

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1. Sunnova makes no guarantees regarding eligibility of any of the system’s costs for tax benefits. Sunnova does not provide tax advice. Contact your personal tax advisor for eligibility requirements.
2. About Form 5695, Residential Energy Credits:” https://www.irs.gov/forms-pubs/ about-form-5695.
3. This list is sourced from: https://www.energy.gov/sites/prod/files/2020/01/f70/Guide%20to%20Federal%20Tax%20Credit%20for%20Residential%20Solar%20PV.pdf
4. This blog provides an overview of the federal residential energy credit for those interested in residential solar photovoltaics or PV and battery storage. It does not constitute professional tax advice or other professional financial guidance. And it should not be used as the only source of information when making purchasing decisions, investment decisions, or tax decisions, or when executing other binding agreements