Solar tax credit in 2026

The 30% federal tax credit ended for homeowner purchases after December 31, 2025.

That credit was the residential clean energy credit, Section 25D of the tax code. The 2025 budget law (the One Big Beautiful Bill Act, signed July 4, 2025) ended it. The IRS says the credit is not available for property placed in service after December 31, 2025, and that you claim it for the year the property is installed, not merely purchased (IRS, residential clean energy credit). A system installed in 2026 for a homeowner who bought it gets no federal credit. This site applies none to its estimates.

What it means for your numbers

Payback figures that assumed a 30% credit are now too short. On a system priced at $2.49 per watt (national median, EnergySage H2 2025, as of 2026-11), losing the credit adds roughly the credit's value to your net cost. Compare any old quote or article against its date.

Leases and power purchase agreements

If a company owns the panels on your roof, it can claim a business credit, Section 48E, rather than you claiming the homeowner credit. Section 48E was not repealed for solar, but it has deadlines: as we read the law, solar facilities generally must begin construction by July 4, 2026 or be placed in service by the end of 2027 (see summaries from SEIA). Whether any of that value reaches you as a lower monthly price is up to the provider, and you do not get the credit yourself. Ask for the terms in writing and read the escalator clause.

What else to check

• State and local tax credits, rebates and property or sales tax exemptions, which are separate from the federal credit.
• Your utility's net metering terms, which set what exported power is worth.
• A tax professional, for your own situation. This page is general information, not tax advice.

Run your own numbers on the solar panel cost calculator, or pick your state on the state calculators.