Prior to January 1, 2020, an owner of solar panels was entitled to a 30% credit against federal income tax owed. In 2020 the credit was reduced to 26%. In 2021 the tax credit drops to 22%, and after that year it disappears. To qualify, a system needs to be “placed in service” prior to the year end deadlines, which means installed, operable and ready for inspection. A limitation many are unaware of is that a solar tax credit will be reduced by the sum of any credit for a plug-in hybrid or electric vehicle purchased that same year. So stagger those purchases in consecutive years to get the full benefit of these federal income tax credits.