The 30% federal solar tax credit is one of the biggest reasons homeowners in California, Texas, and Arizona are making the switch to solar. But here’s the critical detail: this incentive for owned residential solar systems ends December 31, 2025. Whether you purchase your system outright or finance it, you must have it installed and operational before the end of the year to qualify.
To help you make a confident and informed decision, we’ve answered some of the most common questions homeowners are asking right now.
Ready to lock in your savings? Talk to our team today or call (888) 705-0535 before time runs out.
What is the solar tax credit?
The solar investment tax credit (ITC) is a federal incentive that allows homeowners to deduct 30% of the total cost of a solar energy system from their federal income taxes. This includes equipment, labor, and permitting.
When is the solar tax credit ending?
For homeowners who own their solar systems, the 30% tax credit ends on December 31, 2025. After that, it will no longer be available for residential installations.
This means your system must be installed and turned on by the end of this year to receive the credit. Waiting too long could cost you thousands in missed savings.
Does the 30% credit apply to leased solar systems?
Not for homeowners. Homeowners are only able to receive the credit on systems they own. That includes both fully paid systems and those financed through a solar loan. Leased solar systems and third-party-owned systems are not eligible for the residential tax credit.
What does "owning a solar system" mean?
Owning your system means you are purchasing it either upfront or through financing. If you use a solar loan, you’re still considered the owner, and you are eligible for the tax credit. If you lease your system or sign a power purchase agreement (PPA), the installer or financier owns it and gets the tax credit, not you.
What does the solar tax credit cover?
The 30% tax credit covers:
- Solar panels and all system components
- Labor and installation costs
- Permitting and inspection fees
- Energy storage systems (like batteries) installed with your solar
- Sales tax (in some states)
How do I claim the tax credit?
- Work with a trusted solar provider like Empower Home Services to design and install your system.
- Ensure your system is installed and activated before the end of 2025.
- When you file your federal taxes, complete IRS Form 5695 and include the credit amount.
- Apply the credit to reduce your federal tax liability.
We always recommend speaking with a tax professional to ensure everything is filed correctly.
What if I’m not sure whether I should lease or own?
That’s where we come in. At Empower Home Services, our expert consultants will walk you through both options based on your budget, energy goals, and tax eligibility. Our goal is to help you make the smartest financial decision for your home.
Want to explore both options? Check out our solar services page to learn more about what we offer.
Don’t Wait. The Deadline Is Approaching Fast
Permitting, utility approvals, and scheduling can take weeks or even months. Starting now gives you the best chance to complete your installation before the December 31, 2025 deadline.
Ready to take the next step? Fill out our online contact form or call (888) 705-0535 to speak with a solar expert at Empower Home Services. Let’s make sure you get the full benefit of the solar tax credit while it’s still available.