Solar Installer Deductions: The Panels Florida Exempts From Sales Tax, the Credits That Ended for Homeowners and the Ones That Continue for Businesses, the Licensed Contractor, the Dealer Fee, and the Crews on the Roof

Solar installation changed shape in 2025. The homeowner's 30 percent credit ended for systems whose installation is completed after December 31, 2025; the commercial investment credit survives for projects that begin construction by July 4, 2026 or are in service by the end of 2027; and battery storage keeps its own longer schedule. The installer's own tax picture — materials under Florida's solar sales tax exemption, equipment, crews, and the dealer fees embedded in financed sales — is unchanged. What changed is the customer, and the installer's planning follows.

The panels and Florida's exemption

Florida exempts solar energy systems and their components — panels, inverters, racking, wiring specific to the system, and batteries sold as part of it — from sales tax. An installer buys them tax-free with the exemption documented (the purchaser certifies to the seller that the items are for use exclusively in a solar energy system), and charges no tax on the installed system, which is a real property improvement in any case. Components not specific to the solar system (a service panel upgrade's breakers, roofing materials for a re-roof done with the install) follow the real property rule: tax paid at purchase, none charged.

The credits after the 2025 law

| Credit | Status | |---|---| | Residential clean energy credit (the homeowner's 30 percent) | Ended for expenditures after December 31, 2025 | | Commercial clean electricity investment credit for solar and wind | Available for projects that begin construction by July 4, 2026 or are placed in service by December 31, 2027; the full 30 percent rate requires prevailing wage and apprenticeship compliance for projects of one megawatt (AC) or more | | Energy storage investment credit | Continues for standalone and paired storage, which is exempt from the solar and wind deadline; the credit is full for construction beginning through 2033, then 75 percent (2034), 50 percent (2035), and none after | | Transferability | Commercial credits remain transferable to unrelated buyers for cash |

The installer does not claim the customer's credit; it sells systems whose economics the credit shaped. Commercial and storage work, and projects with documented construction starts before the deadline, are where the incentive remains.

Equipment, trucks, and crews

Racking tools, lifts, conduit benders, testing equipment, and trucks over 6,000 pounds are expensed in full or depreciated; ladders, fall protection, and hand tools are supplies. Crews on roofs are construction employees in Florida: workers' compensation from the first employee, with fall protection and electrical safety training deductible and required. Subcontracted electrical or roofing work is reported on Form 1099-NEC for unincorporated subcontractors paid $2,000 or more in 2026 (the threshold was $600 through 2025), with certificates on file.

Licensing

Florida licenses solar contractors through the Construction Industry Licensing Board — state-certified (Certified Solar Contractor, license category CV) or locally registered (RV); electrical contractors install photovoltaic systems under their own licenses, and plumbing contractors may install solar water heating systems. The license holder's qualifier status, exam, continuing education, and renewal are deductible, as are the manufacturer certifications that unlock extended warranties and the utility interconnection registrations.

Financing dealer fees

Financed residential sales carry a dealer fee the lender charges the installer — often a large percentage of the contract — which the installer deducts when incurred, including when it is netted from the lender's funding. The usual treatment reports the full contract price as income and the fee as a cost of the sale; some installers instead treat the fee as a reduction of the sale price. Taxable income is the same either way, but gross receipts are not, so the treatment should be chosen deliberately and applied consistently. Leases and power purchase agreements sold through third-party owners pay the installer a construction fee, which is its income; the system belongs to the owner, who claims any commercial credit.

Deposits, permits, and interconnection

Deposits are income when received for a cash-method installer; permit fees, engineering, and interconnection applications are job costs. Projects that span year-end put the deposit in one year and the balance — paid at permission to operate — in the next.

The demand shift

With the residential credit gone, installers are moving toward commercial projects, storage, and service and maintenance of installed fleets. Service contracts are recurring income; storage sales carry the surviving incentive; and commercial projects need documented construction-start dates to keep theirs. The installer that built its books around residential volume should plan the year ahead on a current-year projection, not last year's.

Worked example. A solar installer sells 90 residential systems in the first half of 2026 (none of them carrying the homeowner's credit — a system completed after December 31, 2025 is a 2026 expenditure even when the customer contracted and paid a deposit in 2025) and pivots to commercial and storage in the second half. It buys $1.9 million of panels, inverters, and racking tax-free under Florida's exemption. Dealer fees on financed residential sales total $410,000, deducted as paid. Twelve installers and three electricians are on payroll with construction workers' compensation. A $600,000 commercial project begins construction in June under the physical work test, preserving the customer's investment credit. The owner pays estimates on a current-year projection, because the second half looks nothing like the first.

Official sources

The Florida Department of Revenue explains: “Florida law exempts solar energy systems, and all components of such systems, from sales and use tax.” — Florida Department of Revenue, Tax Information Publication No. 19A01-09: Solar Energy Systems Sales and Use Tax Exemption, https://floridarevenue.com/taxes/tips/documents/TIP_19A01-09.pdf

The IRS explains: “The credit termination date applies to applicable wind and solar facilities the construction of which begins after July 4, 2026 (beginning of construction deadline), the date that is 12 months after the date of enactment of the OBBBA.” — Internal Revenue Service, Internal Revenue Bulletin: 2025-36, https://www.irs.gov/irb/2025-36_IRB

The Florida Department of Business and Professional Regulation explains: “A “solar contractor” means a contractor whose services consist of the installation, alteration, repair, maintenance, relocation, or replacement of solar panels for potable solar water heating systems, swimming pool solar heating systems, and photovoltaic systems and any appurtenances, apparatus, or equipment used in connection with these systems.” — Florida Department of Business and Professional Regulation, Construction Industry, https://www.myfloridalicense.com/DBPR/construction-industry/

Related guides

• Solar Installer Entity and Estimated Taxes: The Licensed Qualifier, the LLC, the S Election, the Dealer Fee That Hides the Margin, the Year the Residential Credit Ended, and the Commercial Pipeline
• Business Energy Credits After the 2025 Law: What Survives
• Roofing Contractor Deductions: The Materials, the Trucks, the Fall Protection, and the Storm Season That Arrives All at Once
• Electrical Contractor Deductions: The Van Stock, the Tools, the Licenses, and the Code That Changes Every Three Years
• Section 179D Before It Ends: The Building Energy Deduction

Next step

Fairlight Accounting handles U.S. domestic, cross-border (U.S.–Canada), and international tax returns, plus bookkeeping, payroll, and CFO advisory. Our U.S. Tax Desk documents the solar exemption on purchases, tracks dealer fees against each sale, and reprojects the year as the market shifts. See pricing or book a free fit call.