Federal Solar Tax Credit Information

The federal government has created an incentive to encourage the installation of solar panels at your home or business in the form of a federal solar tax credit.  This tax credit is subtracted from your federal income tax payable and is explained in more detail below.  Anyone who has purchased or is contemplating purchase of a solar energy system should consult with an account or the IRS for tax advice. The following information is provided for general information and is not tax advice:

  • For residential solar energy systems  the tax credit is 30 percent of the cost of the system.
  • There is no cap on the tax credit for solar electric systems.
  • If the system is included as part of new construction, then the spending occurs when the taxpayer takes residence of the house.
  • For business solar energy systems the tax credit is 30 percent of the cost and is also eligible for accelerated depreciation.
  • Systems must be placed in service before and December 31, 2016.
  • For tax credit forms and instructions, visit the Internal Revenue website at www.irs.gov.

(From the California Solar Energy Industry Association: at www.calseia.org/tax-credits/)

On May 2, 2013, PG& E announced the termination of the California Solar Initiative rebate of $0.20 per watt for residential solar PV installations.  The Non-Residential PV rebate program remains in effect but new Non-Residential PV installations are being placed on a waitlist.

See http://www.pge.com/en/mybusiness/save/solar/incentives/index.page?

for more information.