IRS Form 5695: How to Claim Any Remaining Solar Tax Credit

If your solar system was placed in service by December 31, 2025, you can still claim the 30% federal credit on that year's tax return using IRS Form 5695 — here's the general shape of how that works.

Who this applies to

Only homeowners whose solar system was purchased (cash or loan) and placed in service on or before December 31, 2025 can claim the Residential Clean Energy Credit. If your system is being installed in 2026 or later as a cash/loan purchase, Form 5695 will show $0 available for the solar portion of the credit, since Section 25D was repealed for expenditures after that date.

The general shape of the form

Form 5695 (Part I, Residential Clean Energy Credit) asks for your total qualifying costs — equipment, labor, and permitting tied directly to the installation — multiplied by the applicable credit percentage. For systems placed in service through 2025, that rate was 30% with no dollar cap. The resulting credit reduces your federal tax liability dollar-for-dollar (a nonrefundable credit, meaning it can't reduce your liability below zero, but unused amounts can generally be carried forward to future tax years).

What counts as a qualifying cost

Generally: solar panels and mounting equipment, inverters, wiring and electrical work directly tied to the system, permitting and inspection fees, and in many cases the labor cost of installation itself. Costs unrelated to the solar system itself — a new roof beyond what's structurally needed for mounting, for example — typically don't qualify, though partial roof work sometimes does under specific IRS guidance. This is exactly the kind of line-item question worth confirming with a tax professional rather than guessing.

What if I financed with a loan?

If you took out a solar loan but you (not a leasing company) own the system, you're still eligible to claim the credit based on the full qualifying cost, not just what you've paid off so far — ownership, not payment status, is what matters for eligibility.

This isn't tax advice

Form 5695 has specific rules around carryforward, coordination with other credits, and documentation requirements that a general guide can't fully capture for your specific situation. If you're claiming this credit, work with a licensed tax professional or use reputable tax software that walks through the current-year IRS instructions directly.