What is the Federal Solar ITC?

How the ITC works

1. Homeowner installs a residential solar system as a cash purchase or financed loan (homeowner owns the system).
2. 30% of the gross install cost qualifies for the federal ITC at tax filing for the year the system is placed in service.
3. The credit is non-refundable — it reduces the homeowner's federal income tax liability dollar-for-dollar but doesn't pay out as cash if there's no liability to offset. Unused credit can typically carry forward (consult a tax professional).
4. Lease and PPA structures route the credit to the financing company (since they own the system), not the homeowner.

Future ITC rate schedule

• 2026–2032: 30%
• 2033: 26%
• 2034: 22%
• 2035+: 0% for residential (commercial rate path may differ)

This schedule reflects current legislation; future changes are possible. This is not tax or legal advice — consult a licensed tax professional for your specific situation.

Why the ITC affects installer pricing economics

The 30% credit reduces the homeowner's net out-of-pocket meaningfully. A $30,000 cash install becomes $21,000 net after ITC. This lets installers maintain healthy per-watt gross pricing while keeping the homeowner's net affordable. Without the ITC, residential solar pricing math compresses dramatically.

Solar Launch's customer portal surfaces gross + ITC + net + 25-year savings on every render, so homeowners see the post-ITC number alongside the rendered roof and projected production.

Show ITC math on every render. Free.

$1 per mailed solar quote. ITC + 25-year savings auto-calculated on the customer portal.

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