That is the area of the tax law regarding this issue that is unclear. Beginning in tax year 2022, the credit is not available to taxpayers, with a reduction in the credit leading up to that date. Per the IRS:
The residential energy efficient property credit allows for a credit equal to the applicable percent of the cost of qualified property. Qualifying properties are solar electric property, solar water heaters, geothermal heat pumps, small wind turbines and fuel cell property. Only fuel cell property is subject to a limitation, which is $500 with respect to each half kilowatt of capacity of the qualified fuel cell property. Generally, this credit for alternative energy equipment terminates for property placed in service after December 31, 2021. The applicable percentages are:
- In the case of property placed in service after December 31, 2016, and before January 1, 2020, 30 percent.
- In the case of property placed in service after December 31, 2019, and before January 1, 2021, 26 percent.
- In the case of property placed in service after December 31, 2020, and before January 1, 2022, 22 percent.
Whether the carry over of the credit for existing placements will continue has not yet been determined.
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