Have you been thinking about going solar but keep putting it off? If you want to save money, it’s time to make definite plans. The solar tax credit will be gone at the end of the year.

The solar tax credit enabled solar homeowners to claim a tax credit equal to 30% of their total equipment and installation costs. It was scheduled to decrease to 26% in 2033 and 23% in 2034 before phasing out entirely. But thanks to Trump’s Big Beautiful Bill, it will end at the end of the year.

If you act soon, you can claim the credit before it’s too late. This article will explain how.

How to Claim the Solar Tax Credit Before the Deadline

Here is the step-by-step process for claiming the credit.

1.  Make Sure You’re Eligible

The first step involves ensuring you are eligible for the tax credit. It’s best to do this before you make any definite plans. Here’s what eligibility looks like:

·  You must own or rent the home in which solar will be installed. The home must be a primary or secondary residence.

·  You must own the system. Rentals and PPAs are not eligible.

·  The system must be new or used for the first time.

·  The system must be certified by the Solar Rating & Certification Corporation (SRCC).

Other issues, such as roof condition, may interfere with solar installation. A provider will conduct a site assessment and tell you what you should do to get solar-ready.

2.  Find a Provider

Next, find a provider who offers solar installations in your area. Here are some things to look for.

·  Positive Reputation: The installer should have positive online reviews and a history of providing excellent service to their community.

·  Efficient Equipment: The company should offer efficient equipment that helps you get the most from your installation.

·  Warranties and Guarantees: These will reduce the risk of expensive repairs and replacements.

·  Services: Installers may offer various services, such as installation, solar batteries, roof repairs, tree trimming, etc. Ensure you work with a company that provides the services you require.

3.  Get the Installation

An installation requires various steps. What’s important to pay attention to here is the timeline. To claim the credit, you must complete all steps, including activation, by the Dec. 31 deadline.

·  Consultation and Site Assessment (1-2 weeks): A representative will visit your home to conduct a consultation and site assessment. Although these activities could be completed in a day, depending on availability, the planner may take a couple of weeks to arrive.

·  System Design and Permitting (1-4 weeks): The contractor will begin working on your solar design. To save time, they may also order the permit from the city and the equipment from the manufacturer. However, these processes can take as long as four weeks in total, depending on the design, the city’s permit process, the equipment availability, and the planner and providers’ scheduling.

·  Installation (1-3 days): Installation typically takes a day but can take as long as 3 days for bigger properties and more complex designs. However, delays can occur in the scheduling process.

·  Final Inspection and Activation (1-2 months): After the process is complete, the city planner must come out for a final inspection. If all goes well, they will give the utility company the green light to activate the system.

If you do the math, you’ll realize that solar installation can take up to six months. Considering the deadline, you can’t start too soon!

“If a homeowner is interested in going solar, they need to start the process right now,” says Emily Walker, director of insights at Energy Sage.

However, consumers are also advised not to move too fast, to ensure they find the best provider and don’t fall victim to scams.

4.  Claim the Credit

The final step involves claiming the credit on your taxes. Here’s what you’ll need to do:

1.    Gather your documentation: To claim the solar credit, complete Form 5695. The form will ask you for information about the cost of the system and the system type. Have your documentation, such as your invoice and manuals, close by.

2.    Transfer the Information from Form 5695 to Form 1040: Form 5695 is a worksheet. After completing it, transfer the information to your 1040, ensuring all applicable credits and payments are factored in.

3.    Submit your taxes and wait for your refund.

You can ask your tax professional for assistance if necessary.

When Did the Solar Tax Credit Start?

The solar tax credit originated during the oil crisis in 1978. It expired in 1985, but was brought back in 2005 under the Energy Policy Act.

Over the years, presidents have extended the bill and altered its terms, including Trump. The latest iteration was in the Inflation Reduction Act of 2022, in which Biden extended it until 2034, although the credit would decrease over time.

However, Trump decided to end the credit in 2025 with the Big Beautiful Bill. He feels gas and coal are better suited to America’s energy needs.

Residents can still benefit from the 48E Third Party Ownership (TPO) arrangement until the end of 2027. Under this arrangement, companies that lease their system or work with a PPA claim the tax credit, and the renter benefits from lower taxes.

What is Covered in the Tax Credit?

The tax credit covers all solar equipment, including panels, water heaters, batteries rated with at least 3 kilowatt-hours (kWh) of storage capacity, and all labor costs. It does not cover additional services like roof repair and tree trimming.

What if the Credit Exceeds My Tax Liability?

If the credit exceeds your tax liability, it will roll over to the following year. Taxpayers can still claim the money they are owed, even when the credit is no longer available.

What Other Credits are Changing?

The solar tax credit isn’t all that’s going away under Trump’s Big Beautiful Bill. You can also say goodbye to:

·  The energy-efficient home improvement credit

·  The new clean vehicle credit and the used clean vehicle credit

How to Save on Solar

The tax credit may be going away, but here’s the good news. There are some ways to save on solar, now and in the future, including the following:

·  Loans and Financing: Banks and governments offer solar loans, which typically have lower interest rates than other loan types. Additionally, contractors often offer zero-down financing.

·  Compare Providers: Comparing providers will help you get the best value. Don’t simply choose the provider that offers the lowest rates; opt for one that provides the best value for your money.

·  Consider State Incentives: The federal solar credit is ending, but states may still offer local credits so people in the region can save.

·  Make the Most of Your Productivity with Batteries or Net Metering: Batteries store energy so you can use it when the sun is not out. They may be expensive, but they can be worth the investment. Additionally, many utility companies offer net metering, which allows customers to sell solar back to the provider in return for a credit on their tax bill.

·  Consider Time of Use Plans: With time of use plans, electricity is cheaper during certain times of the day. Shifting your usage to coincide with off-peak hours can maximize savings.

Additionally, solar can increase your home value and pay off over time. It will just take longer.

Solar America Can Connect You with Recommended Solar Installers

Considering the imminent removal of the tax credit, homeowners must act quickly, but they must also ensure they find the best provider for their needs and avoid scams. Solar America can help.

Fill out our online form for a list of reputable providers in your area. Choose the one best suited to your needs. Our competitive system ensures the lowest prices.

Contact us to connect with a reliable solar installer today.

FAQs

How does IRS verify solar credit for taxes?

The IRS requires homeowners to file Form 5695 and keep detailed records of their solar installation to ensure it meets industry standards.

Where to enter solar tax credit on Turbo Tax?

Solar taxpayers using Turbo Tax should search for the credit under Home Energy Credits in the home section of Turbo Tax. You can find the form by entering Home Energy Credit in the search bar.

Does a tax credit increase my refund?

A credit can lower your tax payment or increase your refund.