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A taxpayer that places a qualifying renewable energy project (such as a solar photovoltaic array) into service in the course of a trade or business is generally permitted to claim ITCs equal to 6 percent of the tax basis of that project. 1 The amount of ITC increases to 30 percent.
When a state or locality has a property tax exemption for a solar system in place, your tax bill doesn't include the added property value from your solar panels.
As of 2025, the federal ITC provides a 30% tax credit for qualified commercial solar installations. This rate is scheduled to remain at 30% through 2032, after which it will step down to 26% in 2033 and 22% in 2034.
The applicable percentage is a two-tier structure of a base rate of 6%, and an alternative rate of 30% (provided the taxpayer meets the wage and workforce requirements, the project is less than 1 MW or the project began construction prior to January 29, 2023).