Key takeaway
For these credits, installation timing matters as much as purchase timing, and Form 5695 is the filing checkpoint that ties it together.
Why this matters in 2026
The IRS says the Residential Clean Energy Credit equals 30% of the cost of new, qualified clean energy property installed from 2022 through December 31, 2025. It also says the credit is not available for property placed in service after December 31, 2025.
That means a homeowner filing in 2026 may still care a lot about the credit if the work was installed in 2025.
The timing rule people miss
The IRS says you must claim the credit for the tax year when the property is installed, not merely when it was purchased.
That is a critical distinction. Ordering equipment in one year and completing installation in another can change which tax return matters.
What kinds of property the IRS lists
The IRS says qualified expenses can include new:
- solar electric panels
- solar water heaters
- wind turbines
- geothermal heat pumps
- fuel cells
- battery storage technology
It also says used clean energy property is not eligible.
How to claim it
The IRS says you claim the credit by filing Form 5695 with your tax return. The 2025 instructions for Form 5695 also say the form is used to take the residential clean energy credit and that any unused portion can be carried forward to 2026.
That matters for two reasons:
- the credit is nonrefundable, so it cannot exceed the tax you owe
- unused credit can still matter later if you cannot use all of it at once
A filing checklist
If you completed qualifying work in 2025 and are filing in 2026, check:
- whether the property was actually installed in 2025
- whether the property type is listed as eligible
- whether you have the records for cost and installation
- whether Form 5695 is included with the return
This is one of those tax items where timing and records matter as much as the headline percentage.
Official references
Related next steps
If a major home project changed your cash flow, test the monthly strain with the Budget Calculator and compare the broader housing impact with the Mortgage Calculator.