Chapter 4 · Federal Incentives in 2026 — The Real Picture
4.2 If you placed in service before the 2025 deadline
- File on IRS Form 5695 for the tax year of interconnection.
- The credit = 30% of all reasonable system costs (equipment, labor, sales tax, permit fees, and structural reinforcement directly related to the install).
- If your federal tax liability for that year isn't enough to absorb the credit, the excess carries forward — but only if you were placed in service before 2025-12-31.
- The credit has no income cap, but you must have federal tax liability to apply it against.
- You must own the system (Cash or Loan both qualify; Lease / PPA homeowners do not).
← Previous
4.1 §25D Residential Clean Energy Credit — terminated
Next →
4.3 Lease / PPA still has a workaround — but it's not for you
Next Step
Questions after reading this section? Send us your utility bill — we will come back within one business day with a recommendation specific to your situation.