Federal solar credit on project completion

[gtoph]

We had put an initial small deposit down on a new solar panel system for our house toward the end of 2022.  They installed all the equipment and it was technically operational by the end of December, however we didnt get PTO from the utility until just recently in 2023.  Now that it's fully connected, I'll be paying the remaining balance.

My question is if I'm only allowed to take the 30% credit on the initial deposit amount for 2022 and have to take the remaining credit on the balance for 2023 taxes, or since it was operational, can I figure the credit based on the whole system cost for 2022 taxes even though I technically didn't pay for the whole thing in 2022?

[Anonymous_]

Check back. I will page @Critter-3 

[DaveF1006 · Accepted solution]

 The instructions for Form 5695 say “Costs are treated as being paid when the original installation of the item is completed,” so you can claim all the costs for your installation no matter when they were paid, but you have to wait to claim them in the year the installation takes place.  Be sure to keep your receipts handy!!

Since the installation is completed in 2022, you will claim the full amount of this credit on your 2022 tax return because you can only claim this credit once for this particular solar panel installation.

{Edited 12/16/22} 1:36 PM PST} @gtoph