For over a decade, "30% off with the federal tax credit" was the first line of almost every US solar pitch. That changed at the end of 2025. If you're pricing solar in 2026, here's exactly what's different.
What actually happened
The Section 25D Residential Clean Energy Credit — the 30% federal credit homeowners claimed for buying and owning a solar system — was ended early by the One Big Beautiful Bill Act, terminating for systems placed in service after December 31, 2025. It had originally been scheduled to run at 30% through 2032 before stepping down. Instead, it simply stopped.
Does this mean solar doesn't pay off anymore?
No — it means the math changed, not that it disappeared. Payback periods are longer without the federal credit, but electricity rates, local incentives, and your own usage still drive most of the outcome. Run your specific numbers, not a rule of thumb from an old article, using the Solar ROI Calculator and the Solar Payback Period Calculator.
What if I already installed solar in 2025?
You're fine — the credit applies to systems placed in service on or before December 31, 2025, regardless of when you claim it. File IRS Form 5695 with that year's tax return.
What incentives are still available in 2026?
The federal residential credit is gone, but it was never the only incentive in most markets:
- State tax credits — several states run their own credits independent of the federal one.
- Utility rebates — many utilities offer a per-watt or flat rebate, especially for battery attachment.
- Property tax exemptions — common in many states, so the added home value from solar doesn't raise your property tax bill.
- Sales tax exemptions — some states don't charge sales tax on solar equipment.
- SRECs — solar renewable energy certificates you can sell in states with SREC markets, an ongoing income stream rather than a one-time credit.
- Net metering — not a tax incentive, but still the single biggest driver of ongoing solar savings. See our net metering guide.
Availability is entirely local. Check a database like DSIRE (Database of State Incentives for Renewables & Efficiency) for your specific state, then plug what you find into the Solar Tax Credit & Incentive Calculator to see your net cost.
What about a solar lease or PPA?
The commercial investment tax credit (Section 48/48E) is still active for business-owned systems, which is why some leased or PPA offers can still reflect a lower effective rate — the installer, not you, claims a credit and may pass some value through in their pricing. You personally receive no tax credit either way. Compare the real numbers, not the marketing pitch, with the Lease vs. Buy vs. PPA Calculator.
Frequently asked questions
Can I still get the 30% federal solar tax credit in 2026?
Not for a new cash or loan purchase — Section 25D expired December 31, 2025. If your system was placed in service on or before that date, you can still claim it on that year's tax return.
What incentives are still active for homeowners in 2026?
State tax credits, utility rebates, property and sales tax exemptions, SRECs, and net metering programs are still active in many areas — availability depends entirely on your state and utility.