Federal Residential Clean Energy Credit (Solar)

About This Program

The federal Residential Clean Energy Credit provides a 30% income tax credit for qualifying solar panel installations, battery storage, small wind, and geothermal heat pump systems installed through 2032. For Nashville homeowners, this can translate to thousands in federal tax savings. The credit is non-refundable but can be carried forward to future tax years. Tennessee does not have a state income tax, so the federal credit is the primary solar incentive.

Non-refundable tax credit — reduces tax owed. A $20,000 solar system yields a $6,000 credit. Excess credit carries forward. Claim on IRS Form 5695.

Key Details

• 30% federal tax credit for solar panel installation
• Includes battery storage, geothermal, small wind
• Non-refundable — reduces taxes owed, excess carries forward
• Available through 2032 at 30% for all income levels
• Claim on IRS Form 5695; use VITA for free filing

How to Apply

Deadline: Through 2032 (30%), phases to 26% 2033, 22% 2034