How to Claim the 30% Federal Tax Credit for Home Batteries in 2026

What is the Residential Clean Energy Credit?

The Residential Clean Energy Credit (Internal Revenue Code §25D) provides a 30% federal income tax credit on the total installed cost of qualifying residential energy storage. The credit is non-refundable (can offset tax liability to zero but cannot generate a refund) but can be carried forward indefinitely. It runs through 2032 with no phase-down, then steps down to 22% in 2033 and expires in 2034.

What qualifies

• Battery capacity of at least 3 kWh (every mainstream home battery qualifies)
• Battery is charged by a solar PV system at least once per calendar year
• System is installed at your primary or secondary U.S. residence
• You own the system (leased or PPA-financed batteries do NOT qualify for the homeowner credit)

Step 1: Get an itemized invoice

Before you can claim the credit, you need an itemized invoice from your installer showing:

• Total system cost (equipment + labor + permitting)
• Breakdown by component (battery, inverter, gateway, mounting, etc.)
• Manufacturer's spec sheet showing battery capacity ≥3 kWh
• Statement that the battery is charged by solar

If your installer issued a single-line "Solar + Storage System" invoice, ask them to re-issue it with itemization. The IRS may challenge unitemized invoices in an audit.

Step 2: File Form 5695 with your tax return

Claim the credit on IRS Form 5695 (Residential Energy Credits), filed with your federal income tax return for the year the battery was placed in service. The form has two parts:

• Part I (Nonbusiness Energy Property Credit): For insulation, windows, doors, HVAC — NOT for batteries
• Part II (Residential Clean Energy Credit): This is where you claim your battery. Line 1 is for solar electric property costs; Line 2 is for solar water heating; Line 3 is for fuel cells; Line 4 is for small wind; Line 5 is for geothermal heat pumps; Line 6 is for battery storage.

Enter your total battery system cost on Line 6. The form automatically calculates 30% of the total as your credit amount.

Step 3: Carry forward any unused credit

If your 30% credit exceeds your federal tax liability for the year, the unused portion carries forward to future tax years indefinitely. For example, if your credit is $4,000 but your federal tax liability is only $2,500, you use $2,500 this year and carry $1,500 forward to next year's return.

Step 4: Keep records for 7 years

Keep the following in your tax records for at least 7 years after filing:

• Itemized installer invoice
• Manufacturer's spec sheet (proving ≥3 kWh capacity)
• Photographs of the installed system
• Statement that the battery is charged by solar
• Copy of Form 5695 and your filed tax return

Common mistakes to avoid

1. Forgetting to claim it. Many homeowners don't realize they qualify and leave $3,000+ on the table.
2. Claiming it the wrong year. The credit is for the year the system is placed in service, not the year you signed the contract or paid the deposit. If your system was installed in December 2026 but commissioned in January 2027, claim it on your 2027 return.
3. Claiming it on a leased system. If you have a solar lease or PPA, the lessor claims the credit — not you. Read your lease agreement.
4. Not carrying forward unused credit. The credit is non-refundable, but the unused portion doesn't disappear — it carries forward. Track it on your future returns.

For full incentive details including state programs that stack with the federal credit, see our cost and incentives guide.