Solar Tax Credits & Incentives

Third-party owned (TPO) solar systems may still qualify for federal business clean-energy tax incentives. With a Prepaid PPA, the solar provider owns the system and may be eligible to claim the federal Clean Electricity Investment Credit under Section 48E. Qualifying systems may be eligible for a credit of up to 30% of the provider’s qualified investment.

Because the provider owns the system, the homeowner does not claim the federal tax credit directly. Instead, a portion of the value of available incentives may be reflected in the price offered to the homeowner. Eligibility, credit amounts, and project deadlines depend on the specific system and tax rules in effect at the time the system is installed.

Commercial solar projects may still qualify for substantial federal tax incentives. Under Section 48E, qualifying projects may be eligible for an investment tax credit of up to 30%, with additional bonus credits potentially available for projects that meet Domestic Content or Energy Community requirements.

A project qualifying for both 10-percentage-point bonus credits could potentially receive a 50% investment tax credit. Eligibility depends on the project, ownership structure, location, equipment, construction date, placed-in-service date, and other federal requirements.