Solar Tax Credit FAQ

Tax Credit FAQ

Solar Tax Credit & Incentives FAQ

Common questions about federal and state solar tax credits, SRECs, and how you can use them to reduce your balance.

Federal & state credits

SRECs covered

Apply toward your balance

Please consult a qualified tax advisor

The information in this article is for general informational purposes only. Tax credits, eligibility, and amounts vary by individual circumstances and are subject to change. We strongly recommend speaking with a qualified tax professional to understand what applies to your specific situation.

Federal Solar Tax Credit

What is the Federal Solar Tax Credit?

The Federal Solar Investment Tax Credit (ITC) allows eligible homeowners to deduct a percentage of the cost of their solar system installation from their federal income taxes.

This credit applies to the total cost of the system — including equipment and installation — and can significantly reduce what you owe in federal taxes for the year the system was installed.

Am I eligible for the federal tax credit?

Eligibility depends on several factors. Generally, you may qualify if:

The solar system is installed at your primary or secondary residence

You own the system (financed systems typically qualify — leases may not)

The system was installed during the applicable tax year

You have sufficient federal tax liability to use the credit

Eligibility rules can be complex. Please consult a qualified tax advisor to confirm whether you qualify.

When should I claim the credit?

The federal tax credit is typically claimed on your federal income tax return for the year your solar system was installed and became operational. Your tax advisor can help you determine the correct year to file and which forms to use.

What if my tax credit exceeds what I owe in taxes?

If your tax credit is more than your federal tax liability for the year, you may be able to carry the unused portion forward to future tax years. Your tax advisor can explain how this works for your specific situation.

State & Local Incentives

Are there state or local incentives available?

Yes — in addition to the federal tax credit, many states and local governments offer their own solar incentives. These may include:

State income tax credits

Property tax exemptions on the added home value from solar

Sales tax exemptions on solar equipment purchases

Utility rebates and local government grants

Available incentives vary significantly by state and locality and are subject to change. Your tax advisor or local government agency can help you identify what's available in your area.

Helpful resources to find incentives in your area:

DSIRE — Database of State Incentives for Renewables & Efficiency

dsireusa.org — The most comprehensive source of state and local solar incentives, rebates, and policies in the U.S.

U.S. Department of Energy — Homeowner's Guide to the Federal Tax Credit

energy.gov — Official government guide explaining how the federal solar tax credit works and who qualifies.

IRS — Residential Clean Energy Credit

irs.gov — Official IRS page for the Residential Clean Energy Credit (Form 5695) used to claim the federal solar tax credit.

Solar Renewable Energy Credits (SRECs)

What is a Solar Renewable Energy Credit (SREC)?

A Solar Renewable Energy Credit (SREC) is a certificate that represents the environmental benefit of generating 1 megawatt-hour (MWh) of solar electricity. For every 1,000 kWh your solar system produces, you earn one SREC.

SRECs can be sold on SREC markets to utility companies that are required by law to generate a certain percentage of their electricity from solar sources. This gives solar system owners an additional income stream on top of their energy savings.

Am I eligible for SRECs?

SREC availability depends on your state. Not all states have active SREC markets. States with active or well-established SREC programs include:

New Jersey, Maryland, Massachusetts, Pennsylvania, Ohio, Washington D.C.

Check dsireusa.org to see if your state has an active SREC program and what the current market rates look like.

Does Skylight Lending handle my SREC application?

This depends on your agreement type:

Loan Customers

If you have a solar loan through Skylight Lending, Skylight Lending will not process or submit SREC applications on your behalf. As the system owner, you are responsible for registering your system, tracking your SRECs, and selling them independently through an SREC aggregator or broker.

Lease Customers

If you have a solar lease, the system is owned by Skylight Lending — not you. As the system owner, Skylight Lending retains the rights to any SRECs generated by the system. Please refer to your lease agreement for details.

How do I register for and sell my SRECs? (Loan customers)

As a loan customer and system owner, you can register and sell your SRECs independently. Here's the general process:

1

Register your system with your state's renewable energy certificate tracking program (e.g., PJM-GATS, NEPOOL-GIS, SREC-Trade)

2

Connect your inverter monitoring to report production data to your state registry

3

Sell your SRECs through an aggregator, broker, or directly on the open SREC market

Applying Your Credit Toward Your Balance

Use Your Tax Credit to Reduce Your Balance

Once you receive your tax credit refund, you have the option to apply it as a voluntary prepayment toward your account balance. This can help you:

Reduce your principal balance

Reach your Principal Target Balance before re-amortization at month 18

Keep your monthly payment lower after re-amortization

Reduce the overall amount of interest you pay over time

To make a prepayment, log in to your Concord-MyEquiant portal and select Principal Balance Reduction Payment, or contact us and we'll be happy to assist you.

Log In to Concord Call Us

Still need help?

We're here for you

Have questions about applying your tax credit toward your balance or understanding your SREC eligibility? Contact us at [phone] or submit a support request. Our Account Services Team is happy to help.

Contact Borrower Support

[phone]
[e-mail]
Mon–Fri 8AM–5PM CST