Federal Tax Credits for Solar -
A federal tax credit of 30% of cost with no upper limit is currently available for both solar photovoltaic and solar water heating systems.
You can either subtract the CPS rebate from the total cost and take the 30% tax credit on the net amount OR you can take the 30% tax credit on the entire cost and pay taxes on the CPS rebate as income. Your tax advisor can help you decide which is preferable for you.. Any unused tax credit can be carried over to the following year. Further information can be found at: www.dsireusa.org or from your tax professional.