IRS Residential Clean Energy Credit (25D)

About This Program

The Section 25D Residential Clean Energy Credit provides a 30% federal tax credit through 2032 on the cost of qualifying clean energy property including solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and battery storage (3 kWh minimum). There is no annual or lifetime dollar limit, and unused credits can carry forward to future tax years. No income limit applies.

No income limit; claim on IRS Form 5695; credit is non-refundable but carryforward allowed; must be primary residence or qualified second home; does not apply to rental property

Key Details

• 30% credit through 2032 — no dollar cap on qualified clean energy systems
• Covers solar panels, solar water heaters, geothermal, wind, battery storage
• Battery storage qualifies (minimum 3 kWh capacity) starting in 2023
• No income limit; carryforward unused credit to future tax years
• File IRS Form 5695; applies to primary or qualified second homes only

How to Apply

Deadline: Annual — claim each year of installation; 30% through 2032, then 26% in 2033, 22% in 2034