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Solar Tax Credits extended!

IRS Form 5695
Step 1: IRS Form 5695
Step 2: IRS Form 1040
IRS Form 1040
ITC extension.jpeg

Inflation Reduction Act of 2022 extends Federal Solar Tax Credit

The US Federal Government offers a solar energy residential tax credit, known as the Solar Investment Tax Credit (ITC), and is applicable to your first/second home, which can be your boat!  As long as there is a head, galley & bunk aboard and it is registered in the United States, your vessel may qualify.  The Credits were due to expire but the Inflation Reduction Act of 2022 has extended it for a further 10 years.  It is now also easier to include your batteries - time for that upgrade!

Who Can Take The Credit?  "You may be able to take the credit if you made energy saving improvements to your home located in the United States in 2022.   A home is where you lived in 2022 and can include a house, houseboat, mobile home, cooperative apartment, condominium....the home doesn't have to be your main home."

In 2022 this tax credit is now back at 30% on the total system cost of all qualified expenditures: this can include solar panels, charge controllers, inverters, wiring, batteries, parts and labor.  There is no maximum limit for equipment placed in service after 2008.  This credit can be retroactive, so long as the solar system was placed into service after January 1, 2006.  

(Disclaimer: As always, please consult with your tax advisor or accountant for the most up to date tax info for your situation.)













It's easy to file!  Step 1: Complete IRS Form 5695.  Be sure to check you use the latest version of the form which is updated January/February each year (note: the above forms are for 2020) 

For instructions on how to complete Form 5695 download the instructions here

Step 2: Once IRS Form 5695 is completed it gives a total that is then entered as a line item on IRS Form 1040.  The two forms are then attached together and filed at the same time as your IRS Form 1040.

If you can't use all of the credit because of the tax liability limit (that is, line 14 is less than line 13), you can carry the unused portion of the credit forward to the next year.

Federal Investment Tax Credit (ITC) Phase Out Dates and Details

Tax Credit on total system cost, placed in service:

Jan. 1, 2022 - Dec. 31, 2032 = 30% tax credit

Jan. 1, 2033 - Dec. 31, 2033 = 26% tax credit

Jan. 1, 2034 - Dec. 31, 2034 = 22% tax credit

                  After Jan. 1, 2035 = 0% tax credit






















Here is a link to the Department of Energy's website that provides a description of the Federal ITC

Solar Tax Credits by State

Various states have their own solar energy tax incentives that may also apply to the purchase of a solar panel system for your boat.  Depending on what state your boat is registered, you may be eligible for added tax incentives or rebates!  The Database of State Incentives for Renewables & Efficiency (DSIRE) website has a wealth of information and is worth checking. 


We have compiled a list of states with relevant solar energy tax incentives and rebates below but please check with your state department as program details are subject to change:





  • Solar and Wind Energy Credit—Income tax credit of 35% of the cost of equipment and installation of solar panels, with a limit of $5,000.



  • Residential Alternative Energy Tax Deduction—Income tax deduction of 40% of the cost of the solar energy system for the year in which the system was installed, plus a 20% deduction of the costs each year for three years after. The maximum deduction per year is $5,000.









New Hampshire


New Jersey


New York




South Carolina










West Virginia





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