I installed solar panels with a battery at a cost of 38000. Turbo tax is telling me I only qualify for a 1200 credit. This is wrong - is there a bug in the system?

[DoninGA]

IRS Form 5695, Residential Energy Credits is estimated to be finalized in TurboTax on 01/14/2026

[Opus 17]

You can only qualify for a credit up to the amount of your tax liability.  This is not the payment you owe when you file, but your overall tax bill.  For example, if you had $5000 of withholding and would normally get a $1000 refund, your tax liability -- what the IRS keeps -- is $4000.  Likewise, if you had $3000 of withholding and owed an extra payment of $1000, your liability is $4000.  The credit can only be applied to your income tax liability, it does not offset self-employment tax or penalties.  

If you have not entered all your income, your tax liability may be too low to receive the full credit.  It will be recalculated when you update your income.  Or, if your income is very low or your other credits very high, you might just not owe enough tax to get the full credit.  The unused portion will carry forward to next year. 

[jonasandcindie]

I owe multiple times that amount in federal taxes so carry over if credit is not the issue 

[AmeliesUncle]

Did you double check that you put it in the correct place?

$1200 is the limit for other kinds of energy improvements to your home.  If you entered it in the wrong place (not specifically where it asks for "solar" or "batteries"), that would explain the $1200.

But as was noted above, it could also be a program error that is wrongly using the $1200 limit for other energy improvement.