SolarCostMath
IRS Section 25D Compliance Standard

30% Solar Tax Credit Calculator

Calculate your exact dollar tax savings and net out-of-pocket investment for solar panels and home battery storage.

System Expenditure Inputs

Enter your gross hardware and installation quotes before incentives.

$
Includes panels, inverters, racking, labor, and municipal permits.
$
e.g. FranklinWH aPower, Tesla Powerwall 3, Enphase IQ 5P (Must be ≥ 3 kWh).
$
Direct upfront cash rebates from your local power utility or state program.
Quick Standard System Presets
Your 30% Federal ITC Tax Credit
$11,250
Dollar-for-dollar tax liability reduction
Gross Project Expenditure: $37,500
− 30% Federal Tax Credit: −$11,250
− State & Utility Rebates: −$1,000
Net Out-of-Pocket Cost: $25,250
IRS Form 5695 Filing Mapping
Line 1 (Qualified Solar Electric Property): $25,000
Line 5b (Qualified Battery Storage Property): $12,500
Line 6 & 15 (Total 30% Tax Credit): $11,250

How the 30% Federal Residential Clean Energy Credit (Section 25D) Works

Passed under the landmark Inflation Reduction Act (IRA), Section 25D of the Internal Revenue Code provides homeowners with a nonrefundable 30% tax credit for qualified clean energy expenditures. The 30% rate is locked in through December 31, 2032, before stepping down to 26% in 2033 and 22% in 2034.

Unlike a tax deduction (which only reduces your taxable income), a tax credit is a direct dollar-for-dollar reduction against the federal income taxes you owe for the tax year the system was placed in service.

What Expenditures Qualify for the 30% Credit?

✓ Solar Photovoltaic (PV) Panels & Inverters: All rooftop or ground-mount hardware.
✓ Home Battery Storage (3+ kWh): Standalone storage (Tesla Powerwall, FranklinWH, Enphase).
✓ Installation Labor & Engineering: Electrician fees, structural prep, and racking.
✓ Municipal Permitting & Interconnection: Utility inspection and city permit costs.

Frequently Asked Questions About the Solar Tax Credit

What is the Federal Residential Clean Energy Credit (Section 25D)?

The Federal Residential Clean Energy Credit allows taxpayers to claim a 30% nonrefundable tax credit on the total gross cost of installing solar panels, standalone battery storage (3+ kWh), and associated electrical/permitting work through the year 2032.

Does battery storage qualify for the 30% solar tax credit without solar panels?

Yes. Under the Inflation Reduction Act of 2022, standalone home battery storage systems with a capacity of 3 kWh or greater (such as FranklinWH aPower, Tesla Powerwall 3, or Enphase 5P) qualify for the full 30% tax credit, even if installed on a standalone basis without solar panels.

What IRS form is used to claim the 30% solar tax credit?

IRS Form 5695 (Residential Energy Credits) Part I is used to report qualified solar electric property costs (Line 1) and qualified battery storage technology costs (Line 5b). The calculated 30% total is carried over to Schedule 3 (Form 1040) Line 5.

What happens if my federal tax liability is less than my 30% solar tax credit?

The federal solar tax credit is nonrefundable, meaning it cannot reduce your tax liability below zero to give you a cash refund directly. However, any unused tax credit rolls over automatically to future tax years for as long as the tax credit remains in effect.