August 24, 2026
Is the federal solar tax credit gone? What actually changed for 2026
The short version
The 30% federal residential clean energy credit -- IRC Section 25D, the one nearly every solar quote referenced for the last decade -- expired on December 31, 2025. It was repealed by the One Big Beautiful Bill Act, signed July 4, 2025, roughly seven years ahead of the phase-down schedule it had been on.
So if you buy a system outright in 2026, or finance it with a solar loan, there is no federal residential tax credit on that purchase. Not a reduced one. None. Any site still advertising 30% off your taxes for a cash or loan purchase is quoting a rule that no longer exists.
We would rather tell you that plainly than let you find out from your accountant next April.
What does still exist
Section 48E, the federal business credit, is still in effect through the end of 2027. It applies to systems that are owned by a business rather than by the homeowner -- which, in residential solar, means third-party-owned systems: leases and power purchase agreements.
In that structure the provider owns the equipment and claims the credit, and the value shows up in the rate you are quoted rather than on your own tax return. You do not file anything for it. It is priced in before you ever see a number.
That is a genuine reversal from how the industry talked about financing for years. Owning your system used to be the tax-advantaged route and leasing was the compromise. For a 2026 residential project, third-party ownership is currently the only structure through which a federal credit reaches the deal at all.
That does not automatically make leasing the right answer
It changes the math, not the decision. Ownership still has real advantages a credit does not decide: the payments end, the asset is yours, and long-run savings on an owned system are typically the highest of the three financing structures. A lease or PPA trades that upside for zero upfront cost, no maintenance responsibility, and now a federal credit reflected in the rate.
Which one wins depends on your tax situation, how long you plan to stay in the house, and what your utility charges. We present all three neutrally and we do not get paid more for steering you toward one. What we will not do is let you assume a credit applies to a purchase when it does not.
State and utility incentives are entirely separate from all of this and still vary widely by where you live. They did not go away with 25D.
One thing worth doing before the end of 2027
Section 48E has an expiry too. If a lease or PPA is the structure you are leaning toward and part of the appeal is that the credit is priced into your rate, that pricing advantage is not permanent either. There is a real, dated deadline here -- unlike the manufactured urgency the solar industry is known for, this one is written into legislation.
We are not going to tell you exactly what it is worth to you, because that depends on the specific system and the provider's pricing. We will tell you the deadline is real and that it is worth having the conversation sooner rather than in 2027.
Common questions
Can I still claim the 30% solar tax credit in 2026?+
Not on a purchase or a loan. IRC Section 25D expired on December 31, 2025. If your system was installed and operational on or before that date, you may still claim it on the relevant tax return -- ask a tax professional about your own filing.
Is there any federal solar credit left?+
Yes, but not one a homeowner claims directly. Section 48E, the business credit, runs through the end of 2027 and applies to third-party-owned systems. With a lease or PPA the provider claims it and the value is reflected in your rate.
Do state and local solar incentives still apply?+
They are separate from the federal credit and many are still active, but they vary by state, utility and sometimes municipality. We will tell you what is current where you live during your consultation.
Find out which financing structure actually fits your situation
We will walk you through loan, lease and PPA against your own bill and tax position -- including where a federal credit still reaches the deal and where it does not. No cost, and no steering.