Residential Clean Energy Credit: The Rules for Installs Through 2025
Published November 4, 2026
The residential clean energy credit gave a tax credit for clean energy equipment in your home. It equaled 30% of the cost of qualifying equipment. You claim it on Form 5695. IRS: Residential Clean Energy Credit
The credit is not available for property placed in service after December 31, 2025. Read the next section before anything else.
What changed after 2025?
The IRS says the credit covers new qualified property installed anytime from 2022 through December 31, 2025. It is not available for any property placed in service after that date. Equipment installed in 2026 does not qualify. If you installed equipment in 2025 or earlier, the rules below apply to your return for that year.
What equipment qualified?
- Solar electric panels
- Solar water heaters
- Wind turbines
- Geothermal heat pumps
- Fuel cells
- Battery storage technology, which counts beginning in 2023. On Form 5695, the battery must have a capacity of at least 3 kilowatt hours.
Used equipment does not qualify.
Who could claim it?
You could claim the credit for improvements to your main home, whether you owned it or rented it. Your main home is generally where you live most of the time. The home must be in the United States. A landlord who does not live in the home could not claim it.
If you use part of your home for business, the amount depends on how much is business use. The IRS says business use up to 20% gets the full credit. Above 20%, the credit is based on the share of costs for nonbusiness use. A second home you live in part-time, and do not rent to others, may qualify for certain improvements. Fuel cell property does not qualify for a second home.
How the credit is figured
The credit is nonrefundable. It cannot be more than the tax you owe. If it is more, you can carry the unused part forward to later years. There is no annual or lifetime dollar limit, except for fuel cell property. Fuel cell property is limited to $500 for each half kilowatt of capacity. For all residents combined, the limit is $1,667 for each half kilowatt.
Interest paid, including loan origination fees, does not count as a cost of the equipment.
An example
Illustration only, with a made-up cost. Chen paid $20,000 in 2025 for solar panels on the home Chen owns and lives in. Chen's credit is 30% of $20,000, which is $6,000. Form 5695 adds the costs first, then multiplies by 30%. If Chen's tax is less than $6,000, the unused part carries forward.
If you installed in 2025 and did not claim it
Check whether the 2025 return included Form 5695. If it did not, read Fix a Mistake on a Filed Return (Form 1040-X) for how to correct a return that was already filed.
Terms to know
- Nonrefundable: the credit can lower your tax to zero, but it does not give you a refund beyond that.
- Carryforward: any unused part moves to later years.
- Form 5695, Part I: the part of the form where the clean energy credit is figured.
What to do next
- Confirm the equipment was placed in service on or before December 31, 2025.
- Gather invoices, the equipment and installation costs, and the home address.
- Confirm the equipment is new and on the qualifying list above.
- Complete Form 5695, Part I, for the year.
- If you missed the credit on a filed return, read the correction guide above.
This page is general information, not advice about your return. Form 5695 and its instructions have the full rules, including the joint occupant and business-use rules.
Sources: IRS: Residential Clean Energy Credit (https://www.irs.gov/credits-deductions/residential-clean-energy-credit); IRS: About Form 5695, Residential Energy Credits (https://www.irs.gov/forms-pubs/about-form-5695); IRS: Form 5695, 2025 (https://www.irs.gov/pub/irs-pdf/f5695.pdf) This is general information, not advice about your specific return.
