Definition and Solar Context
The Federal Investment Tax Credit (ITC) is a federal income tax credit that allows eligible solar system owners to deduct a percentage of their system's installation cost from their federal tax liability. The ITC is one of the most significant financial variables in residential solar economics.
GetSunScore incorporates ITC data into the SunScore™ Projection Engine as a modeled incentive variable affecting estimated payback period and net cost of system ownership. All ITC references on this platform are based on publicly available IRS guidance and Congressional legislation as of the 2024 reference year.
What Does ITC Mean?
The Federal Investment Tax Credit is a provision under the U.S. Internal Revenue Code that permits taxpayers who install qualifying solar energy systems to claim a tax credit equal to a defined percentage of the system's eligible installation cost.
As of the 2024 reference year, the residential ITC rate is 30%, established by the Inflation Reduction Act of 2022. The credit applies directly against federal income tax liability. It is not a rebate or direct payment in standard circumstances.
Why ITC Matters in Solar Savings Modeling
In solar savings modeling, the ITC functions as a cost-reduction variable applied to the gross system cost. The SunScore™ Projection Engine incorporates the ITC as a modeled reduction in net system acquisition cost, which directly affects estimated payback period calculations.
A 30% ITC applied to a modeled system cost meaningfully compresses the projected break-even window compared to scenarios that exclude the credit. Actual tax credit eligibility depends on individual tax circumstances and should be verified with a qualified tax professional.
How ITC Applies in Texas
Texas does not administer the Federal ITC — it is a federal program. However, Texas-based homeowners who install qualifying systems are generally eligible to claim the federal ITC, subject to standard IRS eligibility requirements.
Texas has no state income tax, which means there is no corresponding state-level solar tax credit. Texas-specific incentives, where they exist, tend to be utility-administered rebates or property tax exemptions. GetSunScore sources Texas incentive data from DSIRE and publicly available utility program filings.
Frequently Asked Questions
As of the 2024 reference year, the Federal Investment Tax Credit for residential solar installations is 30% of eligible system costs, as established by the Inflation Reduction Act of 2022. This is an informational reference — not tax advice.
The SunScore™ Projection Engine applies the ITC as a modeled cost-reduction variable. When the ITC is factored in, estimated net system cost decreases, which compresses the projected payback period. GetSunScore presents this as a modeled scenario, not a guaranteed outcome.
Generally, Texas homeowners who install qualifying solar systems may be eligible for the federal ITC. Since Texas has no state income tax, there is no equivalent state-level solar tax credit. Eligibility for the federal ITC depends on individual tax circumstances.
The ITC is a tax credit, not a rebate. It reduces federal income tax liability dollar-for-dollar. If the credit exceeds the taxpayer's liability in the year of installation, the remaining amount may generally be carried forward to subsequent years under current IRS rules.
GetSunScore sources incentive data from DSIRE (Database of State Incentives for Renewables & Efficiency) and publicly available IRS publications. The Buyback Plan and Net Metering glossary entries describe utility-level compensation mechanisms.
All projections referenced on this page are modeled scenarios based on publicly available datasets including NREL, EIA, and Texas utility rate filings (reference year: 2024). Results are non-binding estimates and may vary based on individual system design, usage, local utility tariffs, and regulatory conditions. GetSunScore does not install solar systems, provide financial advice, or guarantee savings.