Form 5695: How to Claim the Solar Tax Credit for 2025

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Your panels went up last fall, the installer flipped the switch a week before Christmas, and every sunny afternoon since, you’ve watched the app show your house making its own power. Now the paperwork: you’ve heard the solar tax credit ended, and you’re not sure whether you’re in time or how the form works. If your installation was finished in 2025, you’re in time. Here’s how to claim it.

Who can still claim the solar tax credit? Anyone whose qualifying solar, battery or other clean energy installation was completed by December 31, 2025, at a home in the U.S. they live in. You claim 30% of the cost on your 2025 return with IRS Form 5695. Credit you can’t use this year carries forward to future years.

This guide walks through the IRS’s 2025 Form 5695 and instructions in plain language. It is not tax advice. Your numbers depend on your whole return, so talk to a tax professional or use reputable tax software.

Form 5695 for solar at a glance

• What it is: IRS Form 5695, Residential Energy Credits. Part I is the Residential Clean Energy Credit (section 25D) for solar, batteries, solar water heaters, geothermal heat pumps, small wind and fuel cells.
• The credit: 30% of qualified costs, labor included, with no overall dollar cap (fuel cells have a cap).
• The cutoff: no credit for expenditures made after December 31, 2025. An expenditure is made when installation is completed.
• Nonrefundable: it can cut your income tax to zero but won’t produce a refund by itself.
• Carryforward: the unused part goes on line 16 and carries to 2026, and later years after that, until it’s used up.
• Where it lands: line 15 of Form 5695 goes to Schedule 3 (Form 1040), line 5a.

Who can still claim the credit on a 2025 return

The IRS rules for 2025 come down to five checks:

1. Installation completed in 2025. Costs are treated as paid when the original installation is completed. If you paid in 2025 but the job finished in 2026, the IRS says you can’t claim it. For a newly built home, solar costs count when your original use of the home begins, so you needed to move in during 2025.
2. A home in the United States that you live in. It can be a house, condo, co-op apartment, houseboat, mobile home or qualifying manufactured home. It doesn’t have to be your main home: a second home you live in part-time and don’t rent out can qualify (fuel cells are the exception; they need your main home). Landlords can’t claim it for homes they rent out and don’t live in.
3. You own the equipment. The IRS says clean energy installations must be owned, not rented or leased, by the taxpayer claiming the credit. If you lease panels or buy power under a PPA, you can’t claim 25D.
4. New equipment. Used property doesn’t qualify.
5. Mostly personal use. If business use of the equipment is 20% or less, you can claim the full credit. Above that, only the personal-use share counts.

Renting the home doesn’t disqualify you: the IRS says you may claim the credit for improvements to a home you live in “whether you own or rent it,” as long as you own the equipment. Condo owners and co-op tenant-stockholders are treated as paying their share of qualifying costs the association or co-op pays.

What costs count, and what to subtract

Counts toward the credit	Doesn’t count, or must be subtracted
Solar panels and the equipment that turns their power into household power	Ordinary roofing, decking and rafters
Solar roofing tiles and shingles that also generate electricity	Loan interest and origination fees
Labor for onsite preparation, assembly and original installation	Extended warranties
Piping or wiring to connect the system to your home	Utility subsidies for the installation (subtract them)
Battery storage of at least 3 kWh	Rebates from the seller, installer or maker (subtract them)
Solar water heaters certified by the SRCC or a state-endorsed body	Equipment for a pool or hot tub

Three rules about other money trip people up:

• Utility subsidies: if a public utility paid part of the cost (to you or to your installer), that amount usually isn’t taxable income, but you must subtract it from your cost before figuring the credit.
• Rebates: a rebate tied to the price, from someone connected to the sale (maker, distributor, seller or installer), lowers your cost. The IRS also treats the federally funded state Home Energy Rebates as rebates.
• Net metering credits and state incentives: the IRS says net metering credits for power you send to the grid don’t affect the credit. State incentives generally don’t reduce your cost unless they qualify as a rebate under federal law, but some may count as income. Ask a tax professional how to treat yours.

Form 5695 Part I, line by line

Here’s how the 2025 form flows. Tax software asks the same questions in plain language and fills these lines for you.

Line	What goes there
Address	The full address of the home where you installed the property (see the instructions if more than one home)
1	Qualified solar electric property costs
2 to 4	Solar water heating, small wind and geothermal heat pump costs
5a and 5b	Battery storage: check “Yes” only if it’s at least 3 kWh, then enter its cost
6a and 6b	Add lines 1 to 5b, then multiply by 30%
7 to 11	Fuel cell property only (main home, capacity limits)
12	Credit carryforward from 2024 (line 16 of your 2024 Form 5695)
13	Add lines 6b, 11 and 12
14	Your limit based on tax, from the Residential Clean Energy Credit Limit Worksheet in the instructions
15	Your credit: the smaller of line 13 or line 14. Also goes on Schedule 3 (Form 1040), line 5a
16	Credit carryforward to 2026: line 13 minus line 15

The line 14 worksheet starts with your tax from Form 1040 (line 18) and subtracts certain other credits you’re taking first, such as the foreign tax credit, the child tax credit, the child and dependent care credit, education credits, the Part II home improvement credit and the adoption credit. What’s left is the most this credit can use this year. The form notes you can skip lines 1 through 11 if you only have a carryforward from 2024, and the instructions say to file Form 5695 even if you can’t use any of your credit in 2025.

A worked example (illustration only)

Say a family’s solar system cost $24,000 installed, completed in November 2025, and their utility paid a $1,000 installation incentive. Qualified cost: $24,000 minus $1,000 = $23,000. Line 6b: 30% of $23,000 = $6,900. Their tax after other credits (line 14) is $4,500, so line 15 is $4,500 and their 2025 income tax drops to zero. Line 16 carries $2,400 to 2026. These numbers are made up to show the math; yours come from your invoice and your return.

Carryforward: unused credit keeps working after 2025

This is the good news hiding behind the headlines. The 2025 law ended the credit for new installations, but it did not change the carryforward rules. The Congressional Research Service says taxpayers who made qualifying expenditures before the end of 2025 can carry unused amounts to future tax years, and that carryforwards can be used indefinitely until the whole credit is used. The IRS’s own credit page says the same: you can carry forward any excess unused credit to reduce tax in future years.

It’s common, too. CRS reports preliminary IRS data for tax year 2023: of nearly 1.4 million people who qualified for the credit, about 43% carried forward part of it and about 10% carried forward all of it.

How it works in practice: CRS’s example is a $9,000 credit for someone who owes $7,000 a year in income tax. Year one, the credit wipes out the $7,000; year two, the remaining $2,000 cuts that year’s tax to $5,000. On your 2026 return, you’ll bring forward the amount from line 16 of your 2025 Form 5695 using the 2026 version of the form; check the IRS’s Form 5695 page for the current version when you file.

Deadlines and amended returns

• Filing your 2025 return: the normal deadline was April 15, 2026. If you filed an extension, it generally runs to October 15, 2026. Disaster-area postponements can move these dates; check IRS.gov.
• Forgot to claim it? The IRS says you can generally amend to claim a refund within 3 years after you filed the original return, or 2 years after you paid the tax, whichever is later. That also applies if you missed the credit for an installation in 2022, 2023 or 2024.
• Keep records: the installer’s invoice and proof of the completion date, the manufacturer’s certification (you keep it, don’t attach it), any rebate or utility incentive letters, and copies of every Form 5695 while you carry credit forward.
• Home basis: the instructions say you must reduce your home’s cost basis by the credit you’re allowed. That matters when you sell the house.

What about Part II (heat pumps, insulation, windows)?

Part II of Form 5695 is the Energy Efficient Home Improvement Credit (25C): 30% up to $1,200 a year for items like insulation, doors and windows, and up to $2,000 a year for heat pumps, heat pump water heaters and biomass stoves. It also ended for property placed in service after December 31, 2025. Two differences matter: it’s for your main home only, and the IRS says unused 25C credit can’t be carried forward. For 2025 items you also need each product’s qualified manufacturer identification number (QMID). More in the heat pump tax credit in 2026.

Mistakes to avoid

• Claiming a system that was finished in 2026 because the contract or deposit was in 2025.
• Claiming leased panels or a PPA system.
• Forgetting to subtract a utility incentive or installer rebate.
• Including loan interest, dealer fees or an extended warranty in the cost.
• Including a new roof (only solar shingles or tiles that generate power count).
• Losing track of the line 16 carryforward in later years.

Get the most from your new solar

Once the paperwork is done, the savings come from using your solar well: running the dishwasher and laundry when the panels are producing, and spotting what quietly eats power at night. A home energy monitor shows production and use side by side.

Prices change often. The prices below are what we saw at the maker in October 2026; check the current price before you buy.

• Emporia Vue 3: clamps inside your breaker panel on the main lines and up to 16 circuits, and Emporia says it tracks solar and net metering. Installing anything inside the panel is a job for a licensed electrician for most people.
• Emporia smart plug: shows what one appliance uses, in the same app. It’s rated 10 A continuous, lower than many plugs, and Emporia says not to use it for fridges, freezers, medical or critical network equipment.

Check the Emporia Vue 3 price on Amazon

More in the best energy monitors and net metering explained.

Keep exploring

For what’s left after the federal credits, start with our home energy rebates guide and the solar tax credit in 2026. Thinking about storage next? See home battery backup and solar panels for home, and for the basics, how solar energy works and electrical energy. Browse all tax credit and grant articles.

Form 5695 questions

Can I still claim the solar tax credit for 2025?

Yes, if the installation was completed by December 31, 2025, at a U.S. home you live in, and you own the equipment. Claim 30% of qualified costs on Form 5695 with your 2025 return. If you already filed without it, the IRS says you can generally amend within 3 years of filing or 2 years of paying the tax, whichever is later.

What happens to unused solar credit now that 25D has ended?

It still carries forward. The 2025 law ended the credit for new expenditures but didn’t change the carryforward rules, according to the Congressional Research Service, and carryforwards can be used until the full credit is used. The amount on line 16 of your 2025 Form 5695 moves to your 2026 return, and so on.

Is the solar tax credit refundable?

No. The IRS calls it a nonrefundable personal credit: it can reduce your income tax to zero, including alternative minimum tax, but any amount above your tax isn’t paid out as a refund. That extra amount carries forward instead. A refund can still happen if you had tax withheld, because the credit lowers the tax those payments are applied to.

Can I claim a battery I added to my solar system?

Yes, for 2025, if the battery has a capacity of at least 3 kWh and was installed by December 31, 2025. Enter it on lines 5a and 5b. Batteries installed in 2026 don’t qualify.

Do I need to attach receipts to Form 5695?

No, but keep them. The instructions say you can rely on the manufacturer’s written certification that a product qualifies and should keep it with your records rather than attach it. Keep the invoice, completion date, any rebate letters and each year’s Form 5695 for as long as you carry credit forward and as long as your home’s basis matters.