Investing in solar energy solutions - like solar panels, energy storage devices, and solar generators - gives you clean energy and backup power in emergencies. Still, upfront cost can be a hurdle for some. Thankfully, the federal solar tax credit - officially called Residential Clean Energy Credit - helps make investing in solar and energy storage batteries more affordable. We’ll walk you through the basics of how the tax credit works, but since we're not tax or legal professionals, be sure to consult with a qualified advisor to make the best decision for your situation.

What Is the Federal Solar Tax Credit?

The Residential Clean Energy Credit - also commonly referred to as the Investment Tax Credit (ITC), Federal Solar Tax Credit, Residential Renewable Energy Tax Credit, or the 30% Solar Tax Credit - is a nonrefundable tax credit that helps offset the cost of installing qualifying clean energy systems. This includes solar panels and home battery storage systems.

Thanks to the Inflation Reduction Act of 2022, the credit was extended and expanded. Homeowners can now claim 30% of the total cost of eligible solar and energy storage installations placed in service between January 1, 2022, and December 31, 2032. The credit will decrease to 26% for systems installed in 2033, drop to 22% in 2034, and is currently set to expire after December 31, 2034.

As of 2023, standalone energy storage devices - such as home backup batteries with a capacity of 3 kilowatt-hours (kWh) or more - also qualify for this tax credit, even if they're not installed alongside solar panels. That means select Goal Zero power stations, including the Yeti PRO 4000, Yeti 6000X, Yeti 3000X, and any solar generator kits that include these models, may be eligible, depending on your setup and how they're installed.

Solar Tax Credit Eligibility

While we recommend speaking with a qualified tax professional for personalized guidance, here are some general eligibility guidelines for the credit:

• Your solar panels or energy storage devices must be installed at a home you use as a residence, either as homeowner or renter.
• You can't claim the credit if you're a landlord or other property owner who doesn't live in the home.
• The system must be placed in service - meaning fully installed and operational - during the tax year you’re claiming the credit. For example, if you purchased equipment in 2024 but installed it in 2025, it can only be claimed on your 2025 tax return.
• Your equipment must be installed, but it does not have to be connected to the electric grid as long as it is still generating electricity to be used at your residence.
• Solar panels do not have to be mounted on the roof to be eligible. Ground-mounted systems are also eligible.
• You can still claim the tax credit even if you finance your system. Consult a tax expert for details on how this works.

⚠️ Note: To qualify as an energy storage device, the battery system must have a capacity of at least 3 kilowatt-hours (kWh).

How Much does the Federal Solar Tax Credit Cover?

There is not a lifetime limit or dollar limit on this tax credit. It covers 30% of qualifying costs in the given year. This means that you could install a qualifying system in 2023 and file for the credit on your 2023 taxes; if you purchase and install new qualifying equipment in 2025, you’d be able to file for the credit again this year for the equipment installed in 2025.

What Expenses are Covered by the Solar Tax Credit?

Once again, we suggest consulting with a tax professional to understand how the credit applies to your specific situation. Here are some of the expenses that can be covered by the solar tax credit:

• Battery storage technologies: energy storage devices that are rated for at least 3 kilowatt hours (3000 Wh, or 3kWh), as long as they were installed after December 31, 2022. This includes select Goal Zero home battery backups like the Yeti 3000X, Yeti 6000X, or Yeti PRO 4000 are systems above 3 kWh that may qualify for the tax credit.
• Solar panels (photovoltaic systems)
• Labor costs associated with on-site preparation, assembly, or original installation
• Equipment required for installation (For example, wiring and mounting equipment)

Investing in solar panels and energy storage systems like power stations can help you reduce energy costs long-term and provide home backup power. Feel free to reach out to us at any time for help finding the right energy solutions for your lifestyle.

Disclaimer:

Goal Zero does not guarantee any tax credit eligibility and this article is for educational purposes only. It does not constitute legal or financial advice. We encourage you to consult a professional tax expert for help with determining eligibility.