Is There Still a Federal Solar Tax Credit in 2026?
No. The federal Residential Clean Energy Credit (Section 25D) — the 30% credit — terminated for expenditures after 31 December 2025 under the law enacted in July 2025. Systems placed in service in 2026 do not qualify. State, local, and utility incentives may still apply.
If you're reading a 2026 solar quote that subtracts 30% for a federal tax credit, the quote is out of date. The residential credit that made that arithmetic work no longer applies to systems placed in service this year.
What changed
The Residential Clean Energy Credit under Section 25D — the 30% credit homeowners claimed for solar, batteries, and similar property — was terminated for expenditures made after 31 December 2025 by the law enacted on 4 July 2025. The Energy Efficient Home Improvement Credit under Section 25C, which covered items such as heat pumps up to $2,000, ended on the same date.
What this does to the payback math
Removing a 30% credit doesn't make solar unviable, but it does lengthen payback materially for a purchased system, because the credit was subtracted from the upfront cost rather than spread across the years. Any payback figure you were quoted in 2025 needs recalculating from the full installed price.
Our Solar Savings Calculator estimates from the installed cost without assuming a federal credit, so the figure it returns is the un-subsidised starting point. Add any state or utility incentive you actually qualify for on top of that.
What still exists
- State income tax credits, rebates, and property or sales tax exemptions, which vary by state.
- Utility rebates and performance incentives in some service territories.
- Net metering or net billing rules, which often matter more to lifetime economics than any one-off rebate.
- Third-party ownership products (leases and PPAs), where the company owning the system claims the business-side credit rather than you — evaluate these on the contract terms, not on a credit you won't claim.
How to check your own situation
- Search your state and utility in the DSIRE database for currently active programmes.
- Ask any installer to show a quote with no federal credit line, so you see the real number.
- Confirm your net metering terms with your utility — future rate changes affect lifetime value more than most rebates.
- Take the final figures to a tax professional before assuming any credit applies to you.
What to do next
If a salesperson is still quoting the 30% federal credit for a 2026 installation, treat it as a signal about the quality of the rest of the quote. Ask for the numbers again without it, then compare against your state's actual programmes.
Sources
- Residential Clean Energy Credit — Internal Revenue Service. Consulted July 22, 2026.
- Expiration and Carryforward Rules for the Residential Clean Energy Credit — Congressional Research Service (congress.gov). Consulted July 22, 2026.
- Energy Efficient Home Improvement Credit — Internal Revenue Service. Consulted July 22, 2026.
- Database of State Incentives for Renewables & Efficiency (DSIRE) — N.C. Clean Energy Technology Center. Consulted July 22, 2026.
Frequently asked questions
Can I still claim the 30% solar credit in 2026?
Not for a system placed in service in 2026. The credit terminated for expenditures after 31 December 2025. If your system was placed in service on or before that date, you would claim it on the corresponding tax return.
Did the heat pump credit end too?
The Energy Efficient Home Improvement Credit (Section 25C), which covered heat pumps up to $2,000, was also terminated on the same date under the same law.
Are there any incentives left for home solar?
Potentially, at state, local, and utility level — and net metering rules still affect the economics. The DSIRE database is the standard place to check what applies at your address.