Residential Clean Energy Credit Calculator
Calculate the 30% federal Residential Clean Energy Credit on home solar, battery, geothermal, and wind installations.
What Qualifies for the 30% Credit
The Residential Clean Energy Credit (Section 25D) covers: (1) solar electric panels (PV), (2) solar water heating, (3) battery storage technology of 3 kWh+ capacity, (4) geothermal heat pumps, (5) fuel cells, (6) small wind turbines for residential use. The credit equals 30% of total installed cost INCLUDING labor — no cap except your tax liability. Effective 2022-2032; drops to 26% in 2033 and 22% in 2034. Source: IRS Section 25D (Inflation Reduction Act, OBBB modifications). Last updated: May 2026.
How Rebates Affect the Credit
Utility rebates and state government rebates received reduce your cost basis for the federal credit. Example: solar costs $30,000, state rebate $4,000 → federal credit applies to $26,000 × 30% = $7,800. Cash rebates from the SELLER (manufacturer or installer) usually don't reduce basis — clarify with installer. Read carefully — many quotes confuse 'rebate' and 'discount' for tax purposes.
Non-Refundable but Unlimited Carryforward
The credit is non-refundable — can reduce tax to zero but won't generate a refund. However, any unused credit carries forward indefinitely until you have enough tax liability to absorb it. Retirees with low tax liability often spread the credit over 2-3 years. Cannot transfer to dealer/installer — only the homeowner can claim it.
Energy-Efficient Home Improvement Credit (Separate)
Section 25C is a DIFFERENT credit for energy-efficient appliances and equipment: heat pumps, insulation, windows, doors, electric panels. Annual cap of $3,200. Don't confuse with 25D — Section 25C has lower percentages and tighter caps but covers more product categories. Some installations qualify for BOTH (heat pump water heaters often).