Is This Your Last Chance to Claim the Solar Tax Credit?
The Residential Clean Energy Credit (RCEC) has been a crucial incentive for promoting renewable energy solutions in homes across the U.S., but time is running out to take full advantage of this tax benefit.
What Is the RCEC?
The RCEC is a non-refundable tax credit that allows eligible taxpayers to claim 30% of the cost of qualified clean energy improvements at their primary or secondary residences. This includes systems such as:
Solar electric panels
Solar water heaters
Geothermal heat pumps
Small wind energy systems
Homeowners, second homeowners, and renters are eligible, as long as they reside in the home. However, landlords and property owners who don't occupy the residence are not eligible.
Current Law and the Scheduled Phaseout
The RCEC currently offers a 30% tax credit for qualifying equipment placed in service between 2022 and 2032. However, the credit will begin phasing out in 2033:
26% for property placed in service in 2033
22% for property placed in service in 2034
It will expire for property placed in service after 2034
Key Changes That Could End the Credit Early
A provision in the 2025 tax law could accelerate the end of the RCEC. If enacted, the law would eliminate eligibility for the credit starting in 2026. This would effectively make 2025 the last year to claim the RCEC.
What Does This Mean for You?
If you’re planning to install solar panels, geothermal systems, or similar renewable energy systems, now is the time to act. As of December 31, 2025, you must have the systems installed to qualify for the full 30% credit. After that, the credit could be significantly reduced or eliminated altogether.
The RCEC is non-refundable, meaning it can't generate a refund beyond your tax liability. However, unused portions of the credit can be carried forward to offset future tax bills.
Act Now
The clock is ticking. Be sure to get your solar or other renewable energy systems installed before the end of 2025 to take full advantage of the 30% tax credit.
For more information or assistance with your tax planning, don’t hesitate to contact us!
