How Many Years Can I Roll Over My Solar Tax Credit?

*DISCLAIMER: While this blog post discusses solar tax credits, you should ALWAYS consult your tax professional for your specific situation. We do not assume responsibility for your tax situation or credits.

The federal solar tax credit, also known as the Investment Tax Credit (ITC), is one of the best solar incentives available for Massachusetts solar installations. 2026 update: the federal residential solar tax credit (Section 25D) was repealed by the One Big Beautiful Bill Act and expired December 31, 2025, so homeowners installing in 2026 no longer receive it. The sections below explain how the credit and its carryforward worked for systems placed in service through 2025, when the credit reduced federal tax liability by 30% of solar installation costs. For most residential solar installations, the solar tax credit leads to thousands of dollars in savings! 

It’s possible that your credit will be worth more than what you owe when you file your tax return. If that’s the case, you can roll over the remaining balance into the following year. If you claimed the credit for a system placed in service through 2025, you can continue to carry forward any unused portion in later tax years, even though the credit is no longer available for new installs. 

Note: the earlier schedule (in effect through 2032, then stepping down in 2033 and 2034) was cancelled. The One Big Beautiful Bill Act ended the residential credit for systems placed in service after December 31, 2025. 

Federal Solar Tax Credit Rollover: How it Works 

The federal solar tax credit works by reducing what you owe in federal income tax by 30% of your solar installation costs. 

To illustrate, let’s say you spend $30,000 to install a solar energy system. Thirty percent of $30,000 is $9,000, which means you would receive a $9,000 tax credit. 

Now, let’s say you owe $8,000 in federal taxes. Your credit covers the entire amount, bringing your tax liability down to zero. But you haven’t used the full credit—there is still $1,000 remaining. You’ll be able to save the remaining $1,000 credit and apply it to your taxes in the following year. 

You can continue to carry forward your remaining balance until you’ve used the entire amount, for as long as the solar tax credit is in effect. 

Can You Claim the Solar Tax Credit if You Don’t Owe Taxes? 

The solar tax credit needs to be claimed for the year your solar installation was completed. If you complete your solar installation in 2023, for example, you will claim the credit on your 2023 tax return. 

If you don’t owe taxes the year you claim your credit, you will not receive the credit in that year. You can, however, carry any unused amount forward. So, if you have tax liability the following year, you may still be able to claim the credit. 

How Many Times Can You Claim the Solar Tax Credit? 

In most cases, you can only claim the residential solar tax credit one time. There are, however, a few exceptions. 

• If you own multiple properties, such as a primary residence and a vacation home, and you install solar panels on both, you can claim the credit for both projects. 
• If you claimed the solar tax credit on a previous solar installation and it’s time to replace the system, you can claim another credit on the new installation. 

Don’t Miss Out on Tax Savings—Go Solar Now! 

Massachusetts still offers strong solar incentives, so there is no reason to wait to start saving. Boston Solar can help you take advantage of the solar incentives available in Massachusetts. We are the leading solar installation company in Massachusetts with over 10 years of experience serving local homeowners. We’ve installed more than 5,000 solar panel systems, and we know what works best for Massachusetts homes. 

Our expert team is here to answer your questions about solar incentives in Massachusetts and help you save as much as possible on your solar installation. 
Ready to explore your Massachusetts solar options? Call 617-858-1645 or contact us to schedule a free consultation.