The Federal Solar Investment Tax Credit was set to decrease from 26% in 2022 to 22% in 2023 under previous legislation. Under the new law, homeowners will be able to claim a tax credit for 30% of the cost of a home solar installation until 2032. The credit then decreases to 26% in 2033 and 22% in 2034 before expiring.

In addition, the bill allows homeowners to apply the 30% credit toward energy storage. This includes battery storage systems installed with or after a home solar array installation. If you’ve been waiting for batteries and worried that the credit would run out before yours could be installed, this new bill is a welcome relief.

You might be eligible for this tax credit if you meet all of the following criteria:

• Your solar PV system was installed between January 1, 2006, and December 31, 2034.
• The solar PV system is located at your primary or secondary residence in the United States, or for an off-site community solar project, if the electricity generated is credited against, and does not exceed, your home’s electricity consumption. The IRS has permitted a taxpayer to claim a section 25D tax credit for purchase of a portion of a community solar project.
• You own the solar PV system (i.e., you purchased it with cash or through financing but you are neither leasing nor are in an arrangement to purchase electricity generated by a system you do not own).
• The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment.