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2026 Update · IRC Section 25D

The 30% Solar Tax Credit Has Ended — Here's What's Left

The federal residential solar credit (25D) ended for systems installed after December 31, 2025. State programs, utility rebates and lease pricing still lower the cost in many places, and HomeShark shows the ones we know of for your state.*

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🔒 PRIVATE ⚡ INSTANT 💰 FREE
$0
federal credit for 2026 purchases
12/31/25
last install date for 25D
2 min
to your free solar estimate
Ended
25D credit for systems installed after 12/31/2025
2025
installs can still be claimed on 2025 taxes
Varies
state and utility incentives by address

What the 2025 tax law did to the solar credit

The law signed July 4, 2025 (Public Law 119-21) moved the end of the residential solar credit from 2034 to December 31, 2025. Homeowners who buy solar with cash or a loan in 2026 get no federal credit.

Still claimable: A system installed by December 31, 2025 can be claimed on your 2025 return with IRS Form 5695, and any unused credit carries forward.
☀️
Residential solar credit (25D)
Ended for systems installed after 12/31/2025
Ended
📄
Solar leases and PPAs
The installer may still claim a commercial credit and pass savings on as a lower price, for a limited time
Ask installers
🏛️
State incentives
Examples: New York's 25% state solar credit (up to $5,000) and Energy Trust of Oregon incentives
Varies
🔌
Utility rebates
Example: Austin Energy's home solar rebate for its customers
Varies
Federal credit for a 2026 cash or loan purchase$0

Does solar still pay off without the credit?

Often, yes, but more slowly. At the same price, a system takes roughly 40% longer to pay back without the 30% credit. Your electricity rate, your utility's net metering or net billing rules and local incentives decide whether it still works for your home. Your HomeShark report sizes a system to your usage and shows the payback with no federal credit.

Leases and power purchase agreements

With a lease or PPA the installer owns the system and may still claim the commercial investment credit (Section 48E). For projects that started construction after July 4, 2026, that credit requires the system to be in service by December 31, 2027. Some installers pass the savings on as lower payments, so compare the total cost over the contract, not just the first payment.

Batteries

The 25D credit for home batteries ended on the same date. Some states and utilities still offer battery incentives, often tied to income or to joining a grid program.

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Frequently asked questions

Is the federal solar tax credit still available in 2026?

Not for homeowners who buy. The residential clean energy credit (25D) ended for systems installed after December 31, 2025. A system installed in 2025 can still be claimed on your 2025 tax return using IRS Form 5695.

What if I paid for solar in 2025 but it was installed in 2026?

The IRS treats the expense as made when installation is complete, so a system finished in 2026 does not qualify even if you paid in 2025. Check with a tax professional about your situation.

Can I still get a credit through a solar lease?

You don't claim it, but the installer may claim a commercial credit on systems it owns and pass some of the savings on through lower pricing. For projects that start after July 4, 2026, the system must be in service by December 31, 2027 for that credit.

Which solar incentives are left?

State tax credits and rebates such as New York's, utility rebates, property and sales tax exemptions in many states, and net metering or net billing. HomeShark lists the programs we know of for your state in your report.

What happened to the step-down schedule?

Under the Inflation Reduction Act the credit was set at 30% through 2032 before stepping down. The 2025 law ended it after December 31, 2025 instead.

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