The Federal Solar Tax Credit (ITC) is one of the most powerful tools for reducing the cost of your solar panel system.
What Is the ITC?
The ITC lets you claim a percentage of your system’s cost as a dollar-for-dollar tax credit. In 2025, it covers 30% of total costs for eligible homeowners.
State and Local Incentives
Many states and utility companies offer additional rebates or performance-based incentives. These can range from $500 to several thousand dollars.
Eligibility
You must own (not lease) the system, and it must be installed on your primary or secondary residence in the U.S. You also need tax liability to use the credit.
How to Claim
You’ll file IRS Form 5695 with your tax return. Most reputable installers will help you gather the correct documentation.
Between federal, state, and local incentives, going solar can be more affordable than you think. Best Solar Companies Near Me only features providers who help you claim every available dollar.