taxpayer may claim a credit of 30% for a solar water heating
system that serves a dwelling unit located in the United States
and used as a residence by the taxpayer. Expenditures with respect
to the equipment are treated as made when the installation is
If the installation is on a new home, the "placed
in service" date is the date of occupancy by the homeowner.
Expenditures include labor costs for onsite preparation,
assembly or original system installation, and for piping or wiring
to interconnect a system to the home.
If the federal tax credit exceeds tax liability,
the excess amount may be carried forward to the succeeding taxable
year. The excess credit can be carried forward until 2016, but
it is unclear whether the unused tax credit can be carried forward
after then. The maximum allowable credit, equipment requirements
and other details vary by technology, as outlined below.
- There is no maximum credit for solar water and space heating
- Systems must be placed in service before December 31, 2016.
- Equipment must be certified for performance by the Solar
Rating Certification Corporation (SRCC) or a comparable entity
endorsed by the government of the state in which the property
- At least half the energy used to heat the dwelling's water
must be from solar in order for the solar water-heating property
expenditures to be eligible.
- The tax credit does not apply to solar water-heating property
for swimming pools or hot tubs.
- The home served by the system does not have to be the taxpayer’s