The federal Residential Clean Energy Credit covers 30% of the cost of solar panels, battery storage, geothermal heat pumps, small wind, and fuel cells — with no dollar cap for most technologies. Enter your project cost to see your credit and true out-of-pocket cost.
| Project | Cost | Federal Credit (30%) | Net Cost |
|---|---|---|---|
| Rooftop solar, 6 kW system | $18,000 | $5,400 | $12,600 |
| Home battery storage (Powerwall-style) | $12,000 | $3,600 | $8,400 |
| Geothermal heat pump install | $25,000 | $7,500 | $17,500 |
| Solar + battery bundle | $40,000 | $12,000 | $28,000 |
| Fuel cell, 10 kW (capped at $500/kW) | $30,000 | $1,500 (cap $5,000 × 30%) | $28,500 |
Fuel cells are the only §25D technology with a dollar cap ($500 per 0.5 kW of capacity); all others use the full 30% of qualified costs.
The Residential Clean Energy Credit (IRC §25D) is a 30% nonrefundable federal tax credit for clean energy property installed at your primary or secondary U.S. residence. It runs at 30% for property placed in service through 2032, then steps down.
Equipment, labor, wiring, permits, inspection fees, and sales tax all count. You cannot include the cost of a structural roof repair or a home energy audit.
The credit is nonrefundable — it reduces your tax bill to zero but you don't get a refund for the excess. Unused credit carries forward to the next tax year, so a large project can be spread over several years. It is claimed on Form 5695.
A 30% credit is not the same as a 30% discount. Because the credit is claimed against federal income tax, its real value depends on your marginal rate and how much liability you have. A household with $12,000 of annual federal liability can absorb a $12,000 credit in one year; a household with $2,000 of liability would need six years of carryforward to fully use the same credit.
Two features make §25D unusually generous compared with other energy incentives. First, there is no income limit and no phase-out. Second, the credit applies to a second home as well as a primary residence (though not to rental property). For solar and battery projects, the 30% rate is locked in through 2032, which is why many homeowners bundle a battery with a solar array in a single tax year.
Before signing a solar contract, compare the after-credit net cost against your utility's net-metering rules and any state or local rebates. Some states (e.g., through their own solar incentive programs) stack on top of the 30% federal credit. In states with 1:1 net metering, exported power offsets retail rates, which changes the payback math considerably versus export compensation at wholesale rates.
The credit also applies to sales tax and installation labor, not just hardware — a detail many homeowners miss when they mentally subtract "30% off the panel price." Always ask the installer for a cost breakdown so the qualified basis is clear on Form 5695.
⚠️ Important: This calculator estimates the federal §25D Residential Clean Energy Credit only. It does not include state or utility rebates, net-metering value, or the §25C home improvement credit. The credit is nonrefundable and carries forward; actual use depends on your federal tax liability each year. Confirm eligibility and qualified costs with a tax professional.