What Qualifies for Solar Tax Credit? Will the Federal Credit Rollover?

The Federal Solar Tax Credit was eliminated by the “One Big Beautiful Bill Act” signed into law this year. Time is almost up if you want to claim this significant dollar-for-dollar incentive. Is there enough time left to complete the consultation and installation process?

• To qualify for the Federal Solar Tax Credit, your installation must be completed by December 31^st, 2025.
• The Federal credit can roll over if you can’t claim it all on a single tax bill.
• There are incentives at the State level to keep solar affordable.
• You need to begin the process today for the best chance of qualifying.

Let’s break down some time-sensitive and often complex questions to help you prepare for your Long Island solar installation.

What is the Federal Solar Tax Credit?

The Federal Solar Tax Credit is an outgoing solar incentive that provides a 30% dollar-for-dollar nonrefundable tax credit based on the cost of your solar installation.

• You can claim the credit for the primary home where you reside.
• Qualified expenses include solar panels, related equipment, and solar batteries.
• The credit is based on your total solar bill.

It will be phased out on December 31^st, 2025. Your system must be installed and approved by that time for you to be eligible to claim the credit on your next tax bill.

What is the Carryforward Provision in the Federal Solar Tax Credit?

Because the Federal Solar Tax Credit is nonrefundable, you won’t get a cash refund for any leftover amount.

• If your solar credit amount is higher than your tax liability, your tax bill will be reduced. Any surplus will remain.
• There’s a carryforward provision, so you can apply the leftover credit to subsequent tax years, until it is consumed.
• There is no time limit for carrying it forward. The amount you claim each year depends on how much of the credit remains and how much federal tax you owe.

There is one important note. While the credit will roll over, the initial claim can only be applied to a system installed on or before December 31^st, 2025.

Can I Realistically Qualify for the Federal Solar Tax Credit in 2025?

The average time from initial solar consultation to final inspection is 2 to 6 months. In the best cases, Power Solutions could have your solar system up and running in 2 to 3 months.

This means that the clock truly is ticking on your Federal Solar Tax Credit. The system must be fully installed and have “permission to operate” from PSEG Long Island before December 31st. Some elements of the process, such as permitting and approvals, can take several weeks to complete, and delays are likely considering the high demand. The inspection and utility interconnection may also take several weeks for completion.

The best way to learn the project timeframe is to contact us for your free solar estimate and consultation today. We can provide estimated project lead times. We manage all paperwork, including permits. Our expertise in this area streamlines the process and can reduce the pre-planning lead times.

Starting now, in August, is your best opportunity to make the deadline. Don’t wait. The window for this valuable solar tax credit is closing fast.

Is Solar Still Worth It Without the Federal Tax Credit?

Solar can still pay for itself without the Federal Solar Tax Credit. The average payback period before incentives is 8 to 10 years. Solar panels last an average of 25 years (and are covered by our warranty for this period). However, many panels last longer and can produce electricity for 30 years or more.

After the payback period, any savings you generate with solar are considered a return on investment.

Even though the Federal credit is going away, there is a New York State Solar Tax Credit that is secure for the foreseeable future. This can provide up to $5,000 as a State Income Tax Credit. Your installation may also qualify for NY-Sun incentives paid directly to your Long Island solar installer to reduce your bill.

You will learn about specific incentives and credits that apply to your installation when you begin your consultation with Power Solutions.

Maximize Your Savings – Begin Your Solar Journey Today

Don’t let your savings opportunities slip away. Contact Power Solutions for your free home solar estimate and energy savings evaluation. We will help you maximize your savings through incentives and tax credits. We streamline the process from consultation and planning to approval and installation, giving you the best chance to claim the Federal Solar Tax Credit before it’s gone.