Solar incentives by state (2026)
The federal solar credit ended in 2025 — but state credits, net metering, and tax exemptions still matter in 2026. Here’s what’s left by state.
The four kinds of solar incentive
After 2025, the incentive landscape changed a lot. Here’s how the pieces fit together in 2026:
- Expired for 2026 purchases
Federal tax credit (IRC §25D)
The 30% residential credit ended December 31, 2025. Owned systems bought in 2026 get $0 federally. Leases/PPAs may still pass through some benefit via the commercial §48E credit.
- Still available in some states
State income-tax credits
Arizona (25%, $1,000 cap), New York (25%, $5,000 cap), and Massachusetts (15%, $1,000 cap) are the standouts. Most states have none.
- Varies by state & utility
Net metering / net billing
How you’re credited for exported power is often worth more than any one-time rebate. Full retail net metering is best; avoided-cost “net billing” is weaker.
- Common
Sales & property tax exemptions
Many states waive sales tax on equipment and exclude the added home value from property tax — quiet but real savings.
State incentive guides
Want the short version? Our ranking of the best states for solar incentives compares all of these at a glance. For the full detail, here are sourced breakdowns of net metering and credits by state:
- California solar incentives CA has no state solar income-tax credit. Property-tax exclusion on added system value covers installs before Jan 1 2027 (sunset; extension bills SB710/AB2389 pending). SGIP battery rebate: standard residential budget closed end-2025; equity-only programs on waitlist. Federal IRC §25D expired Dec 31 2025 and does not apply to 2026 purchases.
- Texas solar incentives No state income tax means no state solar credit. TX Tax Code §11.27 (Form 50-123) provides a 100% property-tax exemption on solar-added home value. Austin Energy offers a $2,500 rebate plus 9.91¢/kWh Value of Solar export credits. CPS Energy residential rebate ended Dec. 2022. Federal IRC §25D credit was repealed; it does not apply to 2026 purchases.
- Florida solar incentives Florida has no state income tax and no solar tax credit. Homeowners receive a permanent 6% sales-tax exemption on solar equipment and a 100% property-tax exclusion on solar-added home value (both automatic). Some municipalities offer additional rebates. The federal IRC §25D residential credit expired 12/31/2025 and does not apply to 2026 purchases.
- Arizona solar incentives Arizona's 25% state income-tax credit is capped at $1,000/year and $1,000 lifetime per residence (ARS 43-1083; 5-yr carryforward). Solar equipment is exempt from Transaction Privilege Tax; installed systems add no taxable home value. No utility rebates from APS or TEP. The federal IRC §25D credit expired 2025-12-31 and does not apply to 2026 purchases.
- North Carolina solar incentives NC has no state solar income-tax credit (expired 2015). The 80% property-tax exclusion on PV appraised value (G.S. 105-275(45)) remains; HB729 phase-out bill has not passed. Duke Energy PowerPair rebate up to ~$9,000 for solar+battery. Exports credited at avoided cost (~$0.034/kWh). Federal IRC §25D expired Dec 31, 2025; no federal credit applies to 2026.
- New Jersey solar incentives NJ has no state income-tax credit. 2026 incentives: SuSI/ADI pays $85/MWh quarterly for 15 years, stepping down to $77/MWh for registrations on/after Jul 27, 2026 (BPU Three-Year Review order, May 2026); 100% sales-tax exemption on solar equipment; permanent property-tax exemption on added home value. The federal IRC §25D credit expired Dec 31, 2025 and does not apply to 2026 purchases.
- New York solar incentives NY: 25% state tax credit, $5,000 cap, 5-yr carry-forward; sales-tax exemption; 15-yr property-tax exemption on added home value (RPTL §487; some localities opt out). NY-Sun per-watt rebates exhausted for standard-income buyers; LMI households (≤80% AMI) qualify at $0.80/W or $0.40/W (LIPA). Federal §25D expired Dec 31 2025—no federal credit for 2026.
Incentive programs change often. Always confirm current values on DSIRE and your state energy office before signing anything.
Frequently asked questions
Is there still a federal solar tax credit in 2026?
Not for homeowners who buy their system. The residential federal solar tax credit (IRC §25D) expired on December 31, 2025. Third-party-owned systems (lease/PPA) may still benefit indirectly through the commercial credit, which is itself phasing down.
Which states have the best solar incentives in 2026?
For direct dollar value, New York (25% credit up to $5,000) leads, followed by Arizona and Massachusetts. New Jersey and Massachusetts also have strong ongoing production incentives (SuSI and SMART). Always confirm current program status on DSIRE.