The Federal Solar Tax Credit Expired. Here Is What Is Left in 2026.
The 30% residential credit ended on 31 December 2025. This page tracks what expired, the exact statutory dates, and the incentives that still exist.
Quick Answer
There is no federal solar tax credit for homeowners in 2026. Section 25D, the 30% Residential Clean Energy Credit, is not available for any property placed in service after 31 December 2025. A $25,000 solar system now costs $25,000. The heat pump and insulation credits under Section 25C ended on the same date, and the Section 30C home EV charger credit ended for equipment placed in service after 30 June 2026. All three were terminated early by the One Big Beautiful Bill Act, signed July 2025. Two things still exist: state and utility programmes, and a route through solar leases and PPAs where the installer rather than you claims a credit.
If you are reading older guidance, it is wrong
Most pages about this credit, including an earlier version of this one, still say the 30% rate runs “through 2032” with a step-down to 26% and 22%. That was the schedule set by the Inflation Reduction Act of 2022, and it was accurate until July 2025. It is no longer the law. If a page quoting 2032, 2033 or 2034 has not been updated since then, treat every number on it as stale.
What expired, and exactly when
Each credit has its own termination date, and the deadline is tied to when the equipment was placed in service, not when you signed a contract or paid a deposit.
| Credit | What it covered | What it was worth | Last day in service |
|---|---|---|---|
| IRC 25DResidential Clean Energy Credit | Solar panels, home batteries (3 kWh+), geothermal, small wind | 30% of cost, no dollar cap | 2025-12-31 |
| IRC 25CEnergy Efficient Home Improvement Credit, heat pump category | Air source heat pumps, heat pump water heaters, biomass stoves | Up to $2,000 per year | 2025-12-31 |
| IRC 25CEnergy Efficient Home Improvement Credit, envelope category | Insulation, air sealing, windows, doors, home energy audits | Up to $1,200 per year | 2025-12-31 |
| IRC 25CEnergy Efficient Home Improvement Credit, electrical panelboard | Electrical panel upgrades, but only alongside other qualifying work | Up to $600 | 2025-12-31 |
| IRC 30CAlternative Fuel Vehicle Refueling Property Credit | Home EV chargers, in eligible census tracts only | 30% of cost, up to $1,000 | 2026-06-30 |
Dates verified against IRS guidance on 31 July 2026. Sources are linked at the foot of this page.
What this does to the numbers
The credit was not a discount, it was a reduction of your federal tax bill, and removing it changes payback maths more than most people expect. A 6 kW system at $18,000 used to carry a $5,400 credit, so the real cost was $12,600. That same system is $18,000 today. If it saves you $1,400 a year, simple payback moves from about nine years to nearly thirteen.
The same applies to heat pumps. A $14,000 heat pump that effectively cost $12,000 after the $2,000 credit now costs $14,000, and heat pump payback was already marginal in states with cheap gas and expensive electricity. Our state by state ROI pages have been recalculated without the credits, which in several states flips the answer from yes to no.
What still exists
State and utility programmes
These are now the main incentives available, and they did not go away with the federal credits. They vary enormously: some states run point of sale rebates, some utilities pay for heat pumps or panel upgrades directly, and a few offer nothing. Because the federal layer is gone, these programmes are the difference between a viable project and a dead one, so check them before you get quotes rather than after. The DSIRE database run by NC State is the most complete public index.
Solar leases and PPAs, where someone else claims the credit
This is the part most homeowners have not heard. Section 25D applied to systems you own. The commercial clean electricity credit under Section 48E was not repealed on the same schedule, and it is claimed by the business that owns the equipment. Under a lease or a power purchase agreement the solar company owns the panels on your roof, so the company can claim a credit that you no longer can, and in principle passes some of that back through a lower monthly rate.
Treat this carefully. It is a real structural difference, not a marketing line, but the party explaining it to you is usually the party selling the lease, and a lease is a materially worse deal than ownership in other ways: you do not own the asset, the escalator clause can outrun your utility savings, and it complicates selling the house. Read our comparison of solar PPAs versus leases versus buying before you take a quote at face value. The 48E route carries its own placed in service deadlines, so ask the installer in writing which credit they are claiming and under what timing.
Work you finished in 2025
If your system was placed in service on or before 31 December 2025 you can still claim the credit on the return covering that tax year, using IRS Form 5695. Expiry removed the credit for future installations, it did not claw back credits already earned. The carryforward rules are unchanged too, so an unused balance from a 2025 installation can still be carried into later tax years.
Where this leaves electrification
The honest summary is that the economics got worse for anything justified mainly by the credit, and stayed exactly the same for anything that was not. Solar, batteries and heat pump retrofits all leaned on the credit heavily. Work you do out of necessity did not lean on it at all: if your panel is undersized for the load you want to add, or you have a panel that needs replacing regardless, the case for that work is the same today as it was in 2024. Note that the $600 panelboard credit only ever applied when the panel work accompanied other qualifying equipment, so a standalone service upgrade was never covered even before the repeal.
Sources
- IRS, Residential Clean Energy Credit (Section 25D)
- IRS, Energy Efficient Home Improvement Credit (Section 25C)
- IRS, Alternative Fuel Vehicle Refueling Property Credit (Section 30C)
- One Big Beautiful Bill Act, Pub. L. 119-21, signed July 2025
This page explains publicly available tax rules and is not tax advice. Credit eligibility depends on your own tax position, and state programmes change frequently. Confirm anything that affects a filing with a qualified tax professional.