Current-law solar incentive guide
What solar incentives are actually left in 2026?
The federal 30% Residential Clean Energy Credit is gone for a homeowner's new solar system completed in 2026. What remains depends on your location: state credits, utility and local rebates, renewable-energy payments, export credits and tax exemptions can still change the math.
Law and sources reviewed July 24, 2026
2026 solar net-cost calculator
Estimate cost after the incentives you find
Start with the installation year. Then enter only incentives that a current program page or written quote says you qualify for.
This calculator is for a system you buy. A lease or PPA has different cash flows because the provider—not the homeowner—owns the system and may claim a commercial credit.
What changed with the federal solar tax credit?
Public Law 119-21 accelerated the end of Internal Revenue Code Section 25D. The IRS now states that the Residential Clean Energy Credit is not available for expenditures after December 31, 2025. For this rule, the expense is generally treated as made when the original installation is completed—not when a contract is signed or a deposit is paid.
| Situation | Federal homeowner credit under current law |
|---|---|
| Eligible system installation completed by Dec. 31, 2025 | 30% Section 25D credit, subject to eligibility and tax rules |
| Paid or contracted in 2025 but completed in 2026 | No new Section 25D credit |
| New homeowner purchase completed in 2026 or later | $0 new Section 25D credit |
| Unused credit from a qualifying prior-year installation | May remain available as a carryforward |
This table covers the federal homeowner credit, not business-owned systems or every possible state tax rule.
The federal path that may remain: a solar lease or PPA
A third-party-owned rooftop system follows different tax rules. In a lease, power-purchase agreement (PPA) or some prepaid products, a solar company or financing entity owns the equipment. If that owner and project qualify, the owner may claim the Section 48E Clean Electricity Investment Credit. The homeowner does not claim it.
The IRS lists a 6% base Section 48E credit, increased up to 30% when prevailing-wage and apprenticeship rules or an exception are satisfied. The 2025 Form 3468 instructions identify a less-than-1-megawatt exception for the increased rate, which typical home systems are far below. Domestic-content, energy-community and some allocated low-income bonuses may add value when their separate rules are met. None of those adders is automatic.
You own the system and rely on local incentives and bill savings.
The provider owns the system and decides how much project value, if any, is reflected in your contract price.
For a typical new residential rooftop project in 2026, third-party ownership is the main remaining federal tax-credit pathway tied to the solar project. That does not make a lease or PPA “free solar.” It is a financing and ownership structure, and the contract—not the tax-credit percentage—determines the homeowner's economics.
Lease and PPA terms to compare before signing
- Starting payment or energy rate compared with your current utility rate.
- Annual escalator: even a modest percentage compounds over a 20- or 25-year agreement.
- Home sale and transfer: check buyer qualification, transfer fees and required payoff options.
- Roof work: identify who pays to remove and reinstall panels when the roof needs repair or replacement.
- Production guarantee and maintenance: understand the remedy if output falls short or equipment is offline.
- End-of-term choices: compare removal, renewal and buyout language, including how a buyout price is determined.
Current federal termination rules also matter to the system owner. IRS Notice 2025-42 explains that the Section 48E termination applies to applicable solar facilities placed in service after December 31, 2027 when construction begins after July 4, 2026. A 2026 rooftop project may still qualify, but providers must verify all current timing, foreign-entity and other requirements.
What solar incentives may still be available in 2026?
State tax credits
Some states provide their own income-tax credit. Rates, caps, residency rules and funding can change, so confirm the current program before treating it as money saved.
Utility and local rebates
Utilities, cities, counties and special districts may offer purchase rebates, battery incentives or income-qualified programs. Some close when annual funding is exhausted.
SRECs and performance payments
In certain markets, solar production creates renewable-energy certificates or performance payments that can be sold or credited over time. Values are not guaranteed.
Net metering or export credits
These are bill credits for electricity sent to the grid, not an upfront rebate. Export rates, rollover rules and system-size limits are utility-specific.
Sales- and property-tax exemptions
A qualifying exemption can prevent sales tax on equipment or keep a solar-related increase in assessed home value from raising property tax. It is avoided cost, not a refund check.
Lease or PPA pricing
A third-party owner may qualify under Section 48E and reflect some project value in a lease or power-purchase agreement. The homeowner does not directly claim that commercial credit.
How to recover a federal credit from an eligible 2025 installation
- Confirm the original installation was completed by December 31, 2025. Paying in 2025 is not enough if completion occurred in 2026.
- Gather the final contract, paid invoices, proof of completion, equipment details and any utility-rebate documentation.
- Review the 2025 Form 5695 instructions. Qualified costs may include eligible equipment and original installation labor; certain rebates reduce the federal credit basis.
- File Form 5695 with the 2025 federal return. If the return was already filed without the credit, speak with a qualified tax professional about correcting it.
- Preserve any unused residential clean energy credit carryforward shown on the form. The IRS's 2025 instructions specifically allow an unused portion limited by tax liability to carry to 2026.
A tax credit reduces tax liability. A rebate reduces purchase cost. A net-metering or export credit reduces future utility bills. A quote that calls all three “incentives” should show each item separately.
How to find incentives that are active where you live
- Search the DSIRE database by ZIP code and state.
- Search your electric utility's own site for “solar rebate,” “distributed generation,” “net metering” and “battery incentive.”
- Check your state energy office and city or county sustainability office.
- Ask an installer to identify the program name, current program page, eligibility rule, funding status and who receives the benefit.
- Enter only verified amounts into the calculator. Keep future bill credits separate from upfront rebates.
What should homeowners anticipate next?
Do not build a 2026 purchase decision around a proposed federal replacement credit. A bill, campaign promise or industry forecast is not an available incentive. Recalculate only after legislation is enacted and the IRS publishes applicable guidance.
The practical opportunity is local: watch state budgets, utility filings, battery programs and export-rate changes. Those programs often open, reach a funding cap, change tiers or close faster than federal tax law changes.
Frequently asked questions
Is the 30% federal solar tax credit gone in 2026?
Yes for a new residential system completed after December 31, 2025. Under current law, the Section 25D Residential Clean Energy Credit is not available for expenditures after that date.
Can I claim the credit if I paid in 2025 but installation finished in 2026?
No. IRS guidance says the expenditure is treated as made when original installation is completed. Payment or a contract in 2025 does not preserve the credit if completion occurred after December 31, 2025.
Can I still claim a qualifying system installed in 2025?
Potentially. A qualifying 2025 installation is claimed on the 2025 tax return using Form 5695. If that return was already filed without the credit, ask a tax professional whether an amended return is appropriate.
Can unused federal solar credit carry into 2026?
Yes. The 2025 Form 5695 instructions state that an unused portion limited by tax liability can be carried to 2026. That is a prior-year carryforward, not a new credit for a 2026 installation.
What solar incentives may still exist in 2026?
Depending on location and eligibility, homeowners may still find state tax credits, utility or local rebates, renewable-energy certificate payments, net-metering or export credits, and property- or sales-tax exemptions.
Can a solar lease or PPA still receive a federal credit in 2026?
Potentially. The third-party system owner—not the homeowner—may qualify for the Section 48E Clean Electricity Investment Credit. The provider may reflect some of that project value in customer pricing, but the credit does not guarantee a lower payment or savings.