Yes. Solar photovoltaic systems do not necessarily have to be installed on your primary residence for you to claim the tax credit.
You might be eligible for this tax credit if you meet the following criteria:
- Your solar PV system was installed between January 1, 2017, and December 31, 2034.
- The solar PV system is located at a residence of yours in the United States.
- Either:
- You own the solar PV system (i.e., you purchased it with cash or through financing but you are neither leasing the system nor nor paying a solar company to purchase the electricity generated by the system).
- Or, you purchased an interest in an off-site community solar project, if the electricity generated is credited against, and does not exceed, your home’s electricity consumption. Notes: the IRS issued a statement (see link above) allowing a particular taxpayer to claim a tax credit for purchasing an interest in an off-site community solar project. However, this document, known as a private letter ruling or PLR, may not be relied on as precedent by other taxpayers. Also, you would not qualify if you only purchase the electricity from a community solar project.
- The solar PV system is new or being used for the first time. The credit can only be claimed on the “original installation” of the solar equipment.
Battery storage technology must have a capacity of at least 3 kilowatt hours.
See this Department of Energy webpage for more information.
Whether you get a refund, and the size of the refund, depends on the amount by which the payments you made, either through withholding, such as from wages or through estimated payments, exceed your tax liability for the year after other credits are applied.
The residential solar energy credit is worth 30% of the installed system costs through 2032.
If in 2023 you end up with a bigger credit than you have income tax due — a $3,000 credit on a $2,500 tax bill, for instance—you can't use the credit to get money back from the IRS. Instead, you can carry the unused portion of the credit over to the following tax year.
See this TurboTax tips article for more information.
See also the IRS Instructions for Form 5695 and this TurboTax help article for more information and instructions.
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