Did the 30% federal solar tax credit expire? (2026)

Yes — the 30% federal solar tax credit for homeowners expired on December 31, 2025. The residential Clean Energy Credit (IRC §25D) was terminated by the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). If you buy and install a solar system in 2026, your federal tax credit is $0. Only systems placed in service on or before December 31, 2025 still qualify for the 30%.

That one change is the single most important fact for any US homeowner pricing solar in 2026 — and many calculators and sales pitches still haven’t caught up.

What exactly expired

§25D was the residential solar tax credit: a dollar-for-dollar reduction of your federal income tax equal to 30% of your system’s cost, available to homeowners who owned their system (paid cash or financed with a loan). On a $20,000 install it was worth about $6,000.

The 2022 Inflation Reduction Act had set that 30% rate to run through 2032, then step down. The 2025 One Big Beautiful Bill Act ended it early, effective for expenditures after December 31, 2025.

Period	Residential §25D credit
2022 – 2025	30% of system cost (no cap)
2026 onward	$0 — credit terminated
Future	Only if new federal legislation restores it

Who is affected

• Cash buyers and solar-loan buyers (you own the system): no federal credit in 2026. You budget the full net cost, minus any state incentives.
• Lease and PPA customers (third-party ownership): the company that owns the panels may still claim the commercial Clean Electricity Investment Credit (§48E) and pass part of it through as a lower monthly payment. Ask the provider exactly how that’s priced — and get it in writing. The commercial credit is also phasing down.

The deadline test: “placed in service”

The IRS treats the expense as made when the original installation is completed — the “placed in service” date. Signing a contract, paying a deposit, or ordering equipment in 2025 does not lock in the credit. If the crew finished the install in 2026, the system does not qualify for §25D. Verify the in-service date with your installer if you were counting on 2025 eligibility.

What still exists in 2026

The federal credit is gone, but several incentives remain — and they vary a lot by state:

• State income-tax credits in a few states — Arizona (25%, $1,000 cap), New York (25%, $5,000 cap), and Massachusetts (15%, $1,000 cap) are the standouts.
• Net metering / net billing — how your utility credits the power you export is often worth more over time than any one-time rebate.
• Sales- and property-tax exemptions — many states waive sales tax on equipment and exclude the added home value from property tax.
• Production incentives — e.g., New Jersey’s SuSI and Massachusetts’s SMART pay you per kWh for years.

See solar incentives by state (2026) for what applies where you live.

How it changes the math

Losing a ~$6,000 credit on a typical system pushes the payback period out by roughly 3–5 years. That doesn’t make solar a bad decision — in high-electricity-rate states the 25-year economics still work — but it does mean you should price your project on the real 2026 numbers, not last year’s.

The honest way to see your figure is to run your own bill: the solar savings calculator uses a 0% federal credit for 2026 purchases by default, so the payback it shows is what you’d actually face. From there, dig into how much solar costs and whether solar is worth it in your state.

Bottom line

The 30% federal residential solar tax credit ended December 31, 2025 and does not apply to 2026 purchases. If a quote, ad, or calculator still assumes it, that information is outdated — confirm current federal and state incentives with the IRS and DSIRE before you sign.