Shedding Some Light on Business Credits for Solar Energy Property

Elizabeth Wilcox

We all know that solar energy can save you money on future energy costs. But did you also know that there is a federal Solar Investment Tax Credit (ITC) of up to 30% of the total cost of the energy property? The energy property must meet performance and quality standards, must be originally placed in service by the taxpayer and defined by the IRS as a qualifying “energy property”. Taxpayers can rely on manufacturer’s statement that property qualifies for the credit.

Below is the table that summarizes the deadlines for  beginning construction on the energy property and placing the energy property in service for commercial and utility properties:

Also, even if the credit exceeds your current tax liability for the year, you can carryforward the unused credit.

A nonbusiness federal solar energy tax credit is also available to homeowners who install qualified solar water heating and electric property. The Residential Energy Tax Credit is 30% of qualified solar property costs for 2019 and then decreases to 26% for 2020, 22% for 2021 and 0% for 2022. Contact Elizabeth Wilcox, CPA at for assistance or questions about the solar energy credit.


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2019-2020 Tax Planning Guide