Form 5695 Explained: Claiming the Tax Credit for Solar Panels and Batteries
Form 5695 is the IRS form for residential energy credits. Part I figures the 30% Residential Clean Energy Credit for solar panels, battery storage of at least 3 kWh and similar property. Part II covers energy efficient home improvements. New solar costs qualify only if installation was completed by December 31, 2025.
Your installer said, "You'll get 30% back." Now you're staring at a four-page IRS form full of lines you've never seen. The good news is that the form is simpler than it looks once you know which lines apply to you. The year matters more than ever, though, because the tax credit for solar panels ended for new installations after 2025. Below, you'll find a line-by-line map for solar and batteries, the timing rule in plain words, what to do with an unused credit, and a separate note if you're planning backup power now.
Who Can Still Use Form 5695 for Solar
Here's the rule: the expense counts in the year installation is completed, not the year you paid for it. So a 2025 install goes on your 2025 return, and a 2026 install gets no credit. The table shows how that plays out.
Your situation | Tax year | Form to use | What you can claim | Source |
Solar or battery installation completed in 2025 | 2025 (return filed in 2026) | 2025 Form 5695, Part I | 30% of qualified costs | IRS 25D page; Form 5695 (2025) |
Paid in 2025, installation completed in 2026 | 2026 | Not Part I for new costs | No 25D credit | IRS FS-2025-05, FAQ 7 |
Unused credit from 2025 | 2026 (return filed in 2027) | 2026 Form 5695 (carryforward only) | The unused 2025 amount | Draft 2026 Instructions for Form 5695 |
Installation completed in 2025, credit not claimed | 2025 | Amended 2025 return (Form 1040-X) with Form 5695 | 30% of qualified costs, within the refund time limit | IRS Topic 308 |
What the Timing Rule Means for You
The IRS FAQ on the 2025 law says an expense "is treated as made when the original installation of the item is completed." That one line settles most questions. Say you paid a deposit in December 2025, but the crew finished in January 2026. In that case, the solar federal tax credit doesn't apply.
Filing in 2026 doesn't help a 2026 install either. If you've been hunting for new tax credit forms for solar that cover this year, there isn't one. The IRS keeps the form year, the year you paid, the installation date and your actual eligibility as four separate questions.
Carryforwards and Missed Claims
What if your credit was bigger than your tax bill? The credit is nonrefundable, so the unused part rolls forward. The draft 2026 Form 5695 instructions say you "may claim only a carryforward" from your prior-year Form 5695, line 16. That draft is marked "not for filing," so check the final version before you use it.
For 2025 returns, the normal due date was April 15, 2026, or October 15, 2026, with an extension. Did you file without claiming the credit? You can file Form 1040-X with Form 5695 attached. IRS Topic 308 on amendments gives you 3 years after filing the original return, or 2 years after paying the tax, whichever is later.
If your credit is larger than what you owe, see how the credit works if you don't owe taxes. For anyone who qualifies, here's the 2025 form line by line.
Form 5695 Part I Line by Line for Solar Panels and Batteries
The line numbers below come from the 2025 Form 5695 on IRS.gov. Fill in only the lines that apply to you and leave the rest blank.
Line (2025 form) | What to enter | Notes |
Address block | Address of the home where the property was installed | Required for lines 1 to 4 and 5b |
Line 1 | Qualified solar electric property costs | Include allocable labor for onsite preparation, assembly or original installation, and wiring to connect the property |
Line 5a | Yes or No: is the battery at least 3 kWh? | If No, no credit for the battery |
Line 5b | Qualified battery storage technology costs | Only if line 5a is Yes |
Line 6a / 6b | Add lines 1 to 5b; multiply by 30% | This is the tentative credit |
Line 12 | Credit carryforward from 2024 (from 2024 Form 5695, line 16) | Skip lines 1 to 11 if you only have a carryforward |
Line 13 | Add lines 6b, 11 and 12 | Total before the tax limit |
Line 14 | Limit from the Residential Clean Energy Credit Limit Worksheet | Worksheet starts from Form 1040, line 18 |
Line 15 | Smaller of line 13 or line 14; also on Schedule 3 (Form 1040), line 5a | The credit you take this year |
Line 16 | Credit carryforward to 2026 (line 13 minus line 15) | Use on the 2026 Form 5695 |
A Quick Example
Let's look at how the solar credit tax math works with made-up numbers. Say your invoice shows $20,000 for panels and labor on line 1 and $10,000 for a 10 kWh battery on line 5b. Line 6a is $30,000, and line 6b is $9,000. If your worksheet limit on line 14 is $6,000, you take $6,000 on line 15 and carry $3,000 to 2026 on line 16. These figures are only an example, so use your own invoice and worksheet.
What Counts as a Qualified Cost
Line 1 isn't just the price of the panels. The IRS Form 5695 instructions say to include labor for onsite preparation, assembly or original installation. Wiring to connect the system to your home counts too. Your installer's invoice should split these costs out, so keep it with your records.
A few items change the number, and one doesn't. According to IRS fact sheet FS-2025-01:
Utility subsidies: If your public utility paid a subsidy toward the system, subtract it from your cost first.
Net metering credits: Payments for extra power you send back to the grid aren't subsidies, so they don't reduce the credit.
Financing costs: Interest, loan origination fees and extended warranty costs aren't eligible.
Second Homes and Where the Credit Goes
Solar and battery property doesn't have to be on your main home. The instructions say it plainly: "The home doesn't have to be your main home." Fuel cells are the one exception, since they must be installed at your main home in the United States.
Once you reach line 15, copy that amount to Schedule 3 (Form 1040), line 5a. Some popular guides list a different line, so trust the form itself. Then attach the federal solar tax credit form to your return. For a broader walkthrough, see our federal solar tax credit guide.
Before Part II, there's one point for readers planning equipment now. The form no longer covers new installations, so backup power is a separate decision.
Planning Home Backup Power Without Counting on the Credit
Keep this decision apart from your taxes. A battery bought or installed now is chosen for the loads it must run, not for a line on Form 5695. So start with a simple question: what has to stay on when the grid goes down?
Start With Your Loads
Walk through your home and read the labels on the things you can't go without. A fridge, Wi-Fi router, lights and a CPAP machine all run on 120V. A well pump or central air often needs a 240V circuit. That split matters more than anything else when you compare systems, so check each load and its starting power before you shop.
Estimating How Long Backup Lasts
For a rough runtime estimate, use usable watt-hours × 0.85 ÷ load watts. For example, 5,000Wh of usable energy running a 400W load gives about 5,000 × 0.85 ÷ 400 = 10.6 hours. The 400W load and the 0.85 factor are example assumptions, so swap in the numbers from your own appliance labels.
Matching an EcoFlow TITAN Model to Your Loads
Two EcoFlow TITAN models split home backup by the voltage of the loads that matter most. If your outage plan is mostly 120V essentials, the EcoFlow TITAN 5000 Classic is built for that job. It has 4,000W of rated output on 120V only, which covers basics like a fridge, lighting and internet.
Does your home also depend on a 240V well pump or another key 240V circuit? Then the EcoFlow TITAN 5000 is the closer fit. It's rated at 7.2kW on 120V/240V split-phase, but check each load and its starting power against that rating first.
With either model, home circuits connect through a Smart Home Panel 10 (SHP10) installed by a licensed electrician. Choose by your real loads and a full installed quote, not by a product name or a tax line, since neither purchase is a cost you can enter on Form 5695 for a 2026 install. For the full price picture, see our breakdown of whole house battery backup cost. Back to the form: Part II is a different credit, and it ended too.
Part I vs Part II: The Two Credits on Form 5695
Many people mix up the two credits because they share the 5695 tax form. They follow different rules, as the table shows.
Credit | Code section | Rate | Limits | End rule | Source |
Residential Clean Energy Credit (Part I): solar, battery 3 kWh+, wind, geothermal, fuel cells | IRC 25D | 30% | No annual dollar cap except fuel cells; unused amount carries forward | No credit for expenditures made after December 31, 2025 | IRS 25D page; Form 5695 instructions |
Energy Efficient Home Improvement Credit (Part II): doors, windows, insulation, heat pumps, audits | IRC 25C | 30% | $1,200 a year overall; $2,000 a year for heat pumps and similar; $150 for a home energy audit | No credit for property placed in service after December 31, 2025 | IRS 25C page; IRS FS-2025-05 |
How Part II Differs in Practice
Part II came with its own paperwork. For 2025 property, the IRS 25C page says most items needed a Qualified Manufacturer Identification Number (QMID) on your return. And unlike Part I, an unused Part II credit can't be carried forward to a later year.
Why Some IRS Pages Still Say 2034
You might also find an older IRS FAQ that says the solar credit runs to 2034. That page was written before the July 4, 2025, law changed, so its end date is out of date. If you had an audit done in 2025, our guide to the home energy audit tax credit explains that item.
The main points come down to a short summary. Here's what to remember before you file.
Conclusion
Form 5695 Part I claims the 30% credit for solar panels and batteries of at least 3 kWh, but only for installations completed by December 31, 2025, and the 2026 form handles carryforwards only. Start by finding the installation completion date on your paperwork, then follow the line map and keep your receipts and the installer's invoice, since that date decides whether any tax credit for solar applies to you. If you're planning backup power now, size it by your loads and compare the EcoFlow TITAN 5000 Classic for 120V essentials and the EcoFlow TITAN 5000 for homes that add 240V circuits, using full installed quotes.
FAQs
What is Form 5695 used for?
It's the IRS form you use to figure and claim residential energy credits. Part I covers the Residential Clean Energy Credit for things like solar and batteries. Part II covers the Energy Efficient Home Improvement Credit for upgrades such as windows and heat pumps.
Can I use Form 5695 for solar panels installed in 2026?
No. The IRS allows no residential clean energy credit for expenditures made after December 31, 2025. Because an expense counts as made when installation is completed, a system finished in 2026 doesn't qualify, even if you paid in 2025.
Which Form 5695 line is for batteries?
On the 2025 form, line 5a asks whether your battery has a capacity of at least 3 kWh. If you check Yes, you enter the battery costs on line 5b. If you check No, the battery gets no credit.
What happens if my credit is bigger than my tax?
The credit is nonrefundable, so you won't get the extra back as a refund. Instead, line 16 of the 2025 form shows the unused amount. You then claim that carryforward on the 2026 Form 5695.
Where does the Form 5695 credit go on my return?
Take the amount from line 15 and enter it on Schedule 3 (Form 1040), line 5a. Then attach the solar tax credit form to your federal return so the IRS can see how you figured it.
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