Is the Solar Tax Credit Still Available in 2026?
The short answer is no. The 30% federal Residential Clean Energy Credit (Section 25D) — the credit that for years made home solar meaningfully cheaper — is not available for any property placed in service after December 31, 2025. Its sibling, the 25C Energy Efficient Home Improvement Credit, ended on the same date. Both terminations were enacted by Public Law 119-21, the "One, Big, Beautiful Bill," signed July 4, 2025. If you are planning a residential solar installation in 2026, you should assume the federal tax credit is off the table — and build your math around the incentives that are actually still available.
Why the answer is "no," and where the confusion comes from
For more than a decade, Section 25D let homeowners claim 30% of the cost of solar, wind, geothermal, and battery storage equipment against their federal taxes, with any unused credit carried forward to future tax years. That credit's end date was originally set far in the future — and this is exactly what causes the confusion. The IRS "Residential Clean Energy Credit" page still contains a stale line saying the credit continues "until the credit begins to phase out in 2033" next to the updated 2025 expiration text. The authoritative source on dates is IRS FAQ FS-2025-05, which states plainly: no 25D expenditures after December 31, 2025, and no 25C property placed in service after December 31, 2025.
What does "not available for any property placed in service after December 31, 2025" mean in practice? The IRS page uses "placed in service" language for 25D, and the FAQ clarifies the timing rule: for 25D, the expenditure counts when the original installation is completed. This is the single most important nuance for anyone who signed a contract in 2025:
- Signing or paying in 2025 is not enough. If you signed a solar contract and paid a deposit in 2025 but the system was not installed and completed in 2025, it does not qualify for the 2025 credit.
- Completion is what counts. A system completed and operational in 2025 qualifies; one that slips into January 2026 does not.
- Carryforward still works. If you claimed 25D for a 2025 installation and the credit exceeded your tax liability, the unused portion may be carried forward — that mechanism survived the termination.
25C, the Energy Efficient Home Improvement Credit of up to $3,200 per year, is similarly limited to improvements placed in service through December 31, 2025. Solar panels themselves were 25D property, but 25C's end matters if you were planning efficiency upgrades (insulation, heat pumps) alongside a solar project.
One partial exception: third-party-owned systems
If you lease your system or sign a power purchase agreement (PPA) instead of buying, the tax picture is different. The commercial credits behind leased systems were also changed by the 2025 law — but the IRS's 48E commercial-credit page has not been updated, so the exact 2026 rules are still being finalized. Treat any installer claim that "the credit still lives on through a lease" with skepticism: get any claimed savings in writing and verify them with a tax professional before signing. One thing the Treasury's consumer solar guide makes clear is that on leases and PPAs, tax credits go to the system owner (the leasing company), not to you — so make sure you understand what, if anything, is actually passed through to your price.
What IS still available in 2026
The federal credits are gone, but solar did not become an incentive-free purchase. States, utilities, and local programs still offer rebates, performance payments, and property-tax treatment. The amounts vary enormously by ZIP code, which is why your first stop should be the DSIRE database (Database of State Incentives for Renewables & Efficiency), which has a zip-code search for state and local incentives.
California — SGIP equity budget
California's Self-Generation Incentive Program (SGIP) is a state program administered by the CPUC, and it has a meaningful pot still relevant in 2026: $280 million was authorized for the Residential Solar and Storage Equity budget. Under that budget, eligible customers can receive $1,100 per kWh of battery storage and $3,100 per kW of solar (equity budget reservations opened June 2, 2025). One caution from the current CPUC data: the general-market Small Residential Storage tier of $150/kWh was listed as "available through 2025" and appears closed to new reservations in 2026 — so the equity budget is the figure to look at. Details at cpuc.ca.gov/SGIP.
New York — NY-Sun
NY-Sun, run by NYSERDA, is active: the April 2026 (Version 22) program manual is current and includes Megawatt Block declining-block incentives plus Affordable Solar Residential adders ($0.80/W upstate and Con Edison territory, $0.40/W on Long Island). Important caveat: some regional residential block funding has reportedly been exhausted — for example, Long Island in September 2026 — so verify your region's current block status before counting on a dollar figure. The manual is at the NYSERDA NY-Sun page.
Illinois — Illinois Shines (SRECs)
Illinois Shines is the state's Adjustable Block Program for Solar Renewable Energy Credits (SRECs), run by the Illinois Power Agency. A June 4, 2026 IPA announcement confirms it is actively operating in 2026, with a Phase II Solar Restitution Program launched June 1, 2026 ($473,000 paid to date). REC payments flow through Approved Vendors, typically on 15-year contracts — meaning the value comes to you over time, not as an upfront discount. See the Illinois Power Agency announcement.
These are the verified programs in the current record. They are not the whole country — which is the entire point of the DSIRE zip search. Your state may offer property-tax exemptions, sales-tax exemptions, or utility rebates that are worth as much in practice as a headline incentive. The federal credit being gone makes these more worth chasing, not less.
Checklist: figure out what you qualify for in 2026
- Confirm your timing. If your system was fully installed in 2025, talk to your tax preparer about claiming 25D on your 2025 return (and carrying forward any unused portion). If installation completed in 2026, the credit is gone — don't let an old blog post convince you otherwise.
- Run the DSIRE zip search. Go to dsireusa.org and search your ZIP code for state, utility, and local solar and storage incentives, plus tax exemptions.
- Check your utility's net metering/billing policy. The rate your utility pays for your exported power is often the biggest "incentive" of all — it can change your payback period by years. We cover the verified state-by-state policies in our net metering by state guide.
- Demand numbers in writing. Any installer incentive claim — especially claims about credits surviving through a lease or PPA — should appear in the written contract, with a named source you can verify independently. Pressure tactics and vague credit talk are on the Treasury's list of solar scam red flags.
The end of the federal credit is a real change — roughly a third of the project's old tax math has disappeared for new residential installs. But 2026 solar is not 2025 solar with the credit ripped out and nothing else left. State and utility programs still move the needle, and the single highest-value thing you can do is verify, in writing and from primary sources, what applies to your address before you sign anything.
Verified: 2026-10-11 — IRS 25D expiration date (Dec 31, 2025) and carryforward; IRS 25C end date; Public Law 119-21 signed July 4, 2025; IRS FAQ FS-2025-05 timing rule (installation completion counts); stale 2033 line on IRS 25D page; DSIRE URL; CA SGIP equity budget figures ($1,100/kWh storage, $3,100/kW solar, $280M authorized); NY-Sun Version 22 active with regional exhaustion caveat; Illinois Shines June 2026 active operation. All linked sources opened and confirmed resolving on 2026-10-11.
This article was drafted with AI assistance and reviewed by the site editor.