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Federal solar tax credit in 2026: what changed

For most of the past decade, a 30% federal tax credit covered a large share of a home solar system's cost. That changed at the end of 2025.

What the change is

The federal residential clean energy credit is not available for property placed in service after December 31, 2025. In plain terms, new residential solar installations completed in 2026 and beyond do not receive the federal credit that earlier installations could claim.

Important

This is general educational information, not tax advice. Your eligibility and timing depend on your specific situation. Confirm with the IRS Residential Clean Energy Credit page and a qualified tax professional.

Why 'no federal credit' doesn't mean 'not worth it'

The federal credit reduced the upfront price, but it was never the only thing that made solar pay off. The core economics come from avoiding grid electricity you would otherwise buy. If your electricity is expensive and your roof gets good sun, a system can still generate strong lifetime savings — it just takes longer to break even without the credit.

The honest answer is that the end of the federal credit raises the bar: more homeowners will land in the "mixed" or "depends on your numbers" zone rather than the "clear yes" zone. That's exactly what our calculator is for.

Federal vs state vs utility vs local

  • Federal: the residential clean energy credit, now unavailable for post-2025 residential installations.
  • State: tax credits, rebates, and performance incentives (like SRECs) that vary widely by state and change often.
  • Utility: rebates and — most importantly — the net-metering or export rate your specific utility pays for energy you send back.
  • Local: occasional city or county programs and property-tax treatment.

Sources

Frequently asked questions

Is there still a federal solar tax credit in 2026?
The federal residential clean energy credit is not available for residential solar placed in service after December 31, 2025. If your system was placed in service in 2025 or earlier, different rules applied. This is general information, not tax advice — confirm your situation with the IRS and a qualified tax professional.
Does the end of the federal credit mean solar isn't worth it?
No — not automatically. The credit lowered upfront cost, but whether solar pays off depends on your electricity rate, local production, install price, and your utility's export credit. In high-rate, high-sun states with good net metering, solar can still make sense; in low-rate states the case is weaker.
What's the difference between federal, state, utility, and local incentives?
Federal incentives came from the IRS and applied nationwide. State incentives (tax credits, rebates, performance payments like SRECs) vary by state. Utility incentives are set by your specific electric utility. Local incentives can come from a city or county. State, utility, and local programs still exist in many places even though the federal residential credit has ended.
Where can I check current incentives for my state?
DSIRE (the Database of State Incentives for Renewables & Efficiency) is the most comprehensive public source. We link to each state's DSIRE page from the state guides. Always verify current terms before making a decision.
Estimate your paybackSee your state guide