Buying Solar Credits: A Powerful Tax Strategy for High-Income Earners

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Chris Bartold

Chris has a bachelor's degree in business and marketing. He excels at quickly identifying strategic solutions for business owners facing challenges starting and scaling. Chris has extensive experience working with and managing sales teams and large business accounts.
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Buying Solar Credits: A Powerful Tax Strategy for High-Income Earners

Contributor, Chris Bartold on September 9, 2025
2 min read

When Congress passed the Inflation Reduction Act, it created one of the most powerful tax-planning tools available today: the ability to buy and sell solar tax credits. For high-income taxpayers, this means you can reduce your federal tax bill without ever installing a single solar panel.

If you’ve heard about transferable tax credits but aren’t sure how they work, this guide will walk you through the essentials—what they are, why they matter, and how you can use them to cut your taxes.

What Does It Mean to Buy Solar Credits?

Traditionally, only the homeowner or business that installed solar panels could claim the federal solar Investment Tax Credit (ITC). But the Inflation Reduction Act changed that. Now, renewable energy credits are transferable.

That means if a developer, business, or installer generates a $1 million solar credit, they can sell it to someone else—often at a discount. Buyers get the credit applied directly to their tax liability, dollar-for-dollar, just as if they had installed solar themselves.

For example:

  • You purchase $100,000 worth of solar credits from a developer.
  • Instead of paying $100,000 in federal taxes, you apply the credits and owe nothing.
  • If you bought them at a discount (say $70,000), you’ve instantly saved $30,000 in taxes.

Why It Matters Now

This strategy has become especially attractive because residential solar credits are expiring at the end of 2025. After that deadline, only homeowners who go through third-party ownership (leases and PPAs) can access credits indirectly.

But with transferable credits, high-income earners don’t have to worry about installation deadlines or eligibility rules. You can buy credits directly from the marketplace and lock in huge savings, regardless of whether you personally go solar.

Who Can Benefit?

Buying solar credits is not for everyone—but for the right taxpayer, it’s incredibly powerful. This strategy is best suited for:

  • High-income earners facing six- or seven-figure federal tax bills.
  • Business owners who want to offset tax liability while supporting clean energy.
  • Investors looking for predictable returns in the form of guaranteed tax savings.

If you’re in a lower tax bracket, the benefit is limited—you can’t “cash out” unused credits. But for those with heavy tax exposure, buying solar credits can provide immediate, meaningful relief.

How the Process Works

  1. Find a credit seller: Developers and brokers now facilitate these transactions.
  2. Negotiate a discount: Most credits sell for $0.65–$0.75 per dollar.
  3. File the paperwork: The IRS requires a transfer agreement and proper documentation.
  4. Apply the credit: Come tax time, you use the credit to offset your federal liability, dollar for dollar.

It’s straightforward, but compliance is key—you’ll want a tax professional to ensure everything is structured correctly.

Pros and Cons of Buying Solar Credits

Like any tax strategy, there are upsides and tradeoffs.

Pros

  • Immediate, guaranteed tax savings.
  • No need to install panels or manage a system.
  • Supports renewable energy projects.

Cons

  • Requires significant cash outlay upfront.
  • IRS rules must be carefully followed.
  • Not useful for taxpayers with low liability.

Deadlines to Keep in Mind

  • December 31, 2025 – Last day to claim the residential solar tax credit for owned systems.
  • Beyond 2025 – Buying transferable credits remains available for high-income taxpayers.

The window for residential-owned solar credits is closing quickly, but the transferability provision ensures opportunities for credit buyers continue well into the future.

Final Thoughts

The ability to buy solar credits is one of the most innovative tax planning opportunities introduced in years. For high-income taxpayers, it’s not just a way to save money—it’s a way to support renewable energy while reducing federal taxes in a completely legal and IRS-approved manner.

If you’re considering this strategy, act soon. Credits are limited, and demand is rising as the 2025 residential deadline approaches. With the right guidance, buying solar credits could be a cornerstone of your tax plan for years to come.

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