You claim the solar panels in the year they were placed in service, even if you are paying over time (as long as it's not a lease agreement). If you can't use the entire credit in the first year, it will carry forward.
To qualify for claiming the solar tax credit on your tax return, you’ll first need to meet some eligibility criteria:
- Your solar equipment needs to be installed between January 1, 2017, and December 31, 2034.
- The solar equipment must be located at a residence of yours within the United States.
- The solar equipment is new or being used for the first time (meets the original installation requirement for claiming the credit).
From there, you’ll need to meet one of these two requirements to claim the credit:
- Purchase the solar system with cash or through some form of financing that isn’t a lease or an agreement to pay a solar company for electricity generated by the system.
- Purchase an interest in a community solar project that is separate from your residential property, if the electricity generated is credited against, and doesn't exceed your home’s electricity consumption.
Click here for Federal Tax Credit for Residential Solar Energy
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