Congratulations on the purchase of your new solar panels. They are sure to help reduce the overall impact of that monthly power bill.
The form that you will need during tax time would be form 5695 Residential Energy Credit. When it comes to the credit that is received for the solar panels you are allowed 26% credit (if installed in 2021) of the total purchase price of the panels. The IRS credit has been extended from its original schedule. Congress passed an act that extended the 26% tax credit from 2020 only to 2021 and 2022 and dropping to 22% in 2023. This allows homeowners to install solar on their homes while taking advantage of the credit for a few extra years. This means that if you owe taxes that credit can offset what you owe. The tax credit is non-refundable, meaning that you will not be able to increase your refund by using the credit only reduce what you owe. The credit for solar panels can be carried back one year and carried forward up to twenty years per IRS code 48. The IRS also allows for other credits on your home while making it energy efficient. Make sure to contact your tax advisor for more details regarding your tax credit.