The Solar Investment Tax Credit (ITC) is a federal incentive program designed to encourage the adoption of solar energy. Under the ITC, homeowners that install solar panel systems can receive a tax credit worth 30% of the total cost of the system. This credit can be used to offset federal income taxes.

To claim the ITC, homeowners must file IRS Form 5695 with their tax returns. This form calculates the amount of the tax credit based on the total cost of the solar panel system. The credit can then be used to offset federal income taxes for the year in which the system was installed.

It’s important to note that the ITC can only be used to offset federal income taxes. If a homeowner does not have enough tax liability to use the full credit in the year the system was installed, the credit can be carried forward to future tax years.

To maximize the benefits of the ITC, homeowners should work with a reputable solar panel installer to ensure that the system is properly sized and installed for maximum energy production and savings.

Overall, the solar ITC is a valuable incentive program that can help offset the cost of installing a solar panel system. By taking advantage of the program, homeowners can reduce their carbon footprint and potentially save money on their energy bills.