Homeowners who install a residential solar system may be eligible for federal and state tax credits, as well as energy savings. The Federal Investment Tax Credit (ITC) allows homeowners to deduct up to 26% of the cost of installing a solar system from their federal taxes. In addition, some states offer their own tax incentives, rebates, or property tax exemptions for solar installations. In terms of energy savings, a residential solar system can help you reduce your energy bills by generating your own electricity and avoiding high electricity rates during peak hours. Over time, the savings can add up, and you can enjoy greater energy independence and security for your home