Dear [CLIENT NAME]:

More and more people each year are installing solar panels on their home, businesses, and rental properties, and the energy cost savings can be substantial.

Taxpayers who completed installation of their residential solar projects before January 1, 2026, can claim a tax credit of up to 30% of the cost of buying and installing the panels. The credit was originally scheduled to expire on December 31, 2034, but the One Big, Beautiful Bill Act (OBBBA) of 2025 cut off the credit much earlier than previously scheduled.

Despite loss of the federal tax credit, the state of California often provides rebates for taxpayers who install solar panels on their home. State rebates are not claimed on an income tax return; you must apply for the rebates separately. The companies that sell solar panels will generally be able to assist you with your rebate applications.

For more information on California’s rebates, please visit the California Solar Initiative website, which you can find at the California Public Utilities Commission website here: www.cpuc.ca.gov

 

Sincerely,

Your tax professional