If you buy and install a solar system in 2026, you cannot claim the 30% federal solar tax credit. The homeowner credit, officially the Residential Clean Energy Credit (Section 25D), ended for systems completed after December 31, 2025. There was no phase-down. The credit went from 30% to zero overnight.
That is a big change, and a lot of outdated advice is still online. This guide explains what happened, who can still claim the credit, how leases and PPAs still capture some federal value, and which incentives are left. It also covers what the change means if you are considering a solar roof or solar tiles instead of panels.
The short version:
- Bought and installed solar in 2026? No federal tax credit.
- Installation finished by December 31, 2025? You can still claim 30% on your 2025 tax return, and carry forward any unused amount.
- Leasing or signing a PPA? The company that owns the system may still claim a 30% commercial credit and pass savings to you, under strict deadlines.
- State and local incentives still exist in many states.
- Electricity prices are rising, which keeps solar worth a look even without the federal credit.
What Happened to the 30% Federal Solar Tax Credit?
The One Big Beautiful Bill Act, signed on July 4, 2025, ended the federal solar tax credit for homeowners about seven years early. Under the Inflation Reduction Act, the 30% credit had been scheduled to last through 2032, then step down to 26% in 2033 and 22% in 2034. Instead, it ended for expenditures made after December 31, 2025, according to EnergySage.
The same law ended other home energy credits too. The Energy Efficient Home Improvement Credit (Section 25C), which covered heat pumps, insulation and windows, also ended after December 31, 2025.
| Date | What changed |
|---|---|
| July 4, 2026 | Deadline for leased and PPA solar to begin construction and keep a longer runway for the commercial credit |
| January 1, 2026 | Homeowner-owned solar and batteries no longer qualify for any federal tax credit |
| December 31, 2025 | Last day a homeowner’s installation could be completed and still qualify for the 30% credit |
| July 4, 2025 | One Big Beautiful Bill Act signed, repealing the homeowner credit early |
What the credit used to cover
Through 2025, the credit was worth 30% of qualifying costs, with no income limit and no dollar cap. It covered solar panels or solar roofing, inverters, wiring, installation labor, permitting fees, and batteries of at least 3 kWh. It was nonrefundable, which means it could reduce the tax you owed but not create a refund on its own.
Who Can Still Claim the Federal Solar Tax Credit?
You can still claim the 30% credit if your system’s installation was completed by December 31, 2025. You claim it on your 2025 federal tax return.
The completion date is what counts, not the payment date
This rule catches many homeowners off guard. IRS guidance treats a solar expense as made when the installation is completed, not when you pay for it, according to Spidell’s summary of IRS fact sheet FS-2025-05. If you signed and paid in 2025 but the installation finished in January 2026, you do not qualify.
Unused credit carries forward
The credit is nonrefundable, so it can only offset taxes you owe. If your 2025 credit is larger than your tax bill, you can generally carry the unused amount forward to future tax years. That carryforward is not affected by the repeal.
How to claim a 2025 installation
- Gather your paperwork. Keep the contract, final invoice, proof of payment, and the date the installation was completed.
- Separate solar costs from roofing costs. With a solar roof, only the solar-generating portion qualified. Ask your installer for a written breakdown of solar costs versus standard roofing materials, underlayment, and structural work.
- File IRS Form 5695 (Residential Energy Credits) with your 2025 federal return.
- Talk to a tax professional if your situation is complicated, such as a large carryforward or a home used partly for business.
Do You Get a Tax Credit for Leasing Solar Panels?
Not directly, but a lease or power purchase agreement (PPA) is now the only way most homeowners can benefit from a 30% federal credit. When a company owns the system on your roof, it can claim the commercial clean energy credit (Section 48E) and pass part of the value to you through lower monthly payments.
This option has firm deadlines. Projects that began construction by July 4, 2026 have four calendar years to be placed in service. Projects that begin construction after July 4, 2026 must be placed in service by December 31, 2027, or they get no credit at all, according to Portlandia Electric’s summary of the rules.
System owners must also follow new foreign-sourcing rules. In February 2026, the IRS issued interim guidance (Notice 2026-15) on how much equipment can come from certain foreign entities, as explained by Novogradac. That is the leasing company’s responsibility, not yours.
Lease or buy? The tradeoffs
- A lease or PPA lowers or removes upfront cost, but you don’t own the system. You don’t build equity in it, and selling your home means the buyer has to agree to take over the contract.
- Buying costs more upfront in 2026, but you own the system outright. An owned system is easier to account for when you sell.
- Integrated solar roofs are rarely leased. Most lease and PPA programs are built around rack-mounted panels. If you want a solar tile roof, plan on buying it.
Solar Incentives Still Available in 2026
The federal credit is gone for buyers, but state, local, and utility programs are separate and many are still active. They vary widely, so check what applies to your address.
- State income tax credits. Several states, including Arizona, New York, and South Carolina, offer their own credits for residential solar.
- Property tax exemptions. Many states exclude the added value of a solar system from your property tax assessment.
- Sales tax exemptions. Some states waive sales tax on solar equipment.
- Solar renewable energy credits (SRECs). In states such as New Jersey, Massachusetts, Illinois, Maryland, Pennsylvania, and Ohio, you can earn payments for the power your system produces.
- Utility rebates and net metering. Many utilities offer rebates or credit you for excess power you send to the grid. Net metering rules differ by state, so learn how net metering works where you live.
The DSIRE database lists current state and local programs by ZIP code.
Rising electricity rates do some of the work
The less you pay the utility, the more solar saves. Average US residential electricity rates rose 7.3% in one year, from 17.55 cents per kWh in April 2025 to 18.83 cents in April 2026, according to EIA data reported by Newsweek. In California, the average was 35.25 cents, and in Connecticut 32.24 cents. In high-rate states, solar can still pay for itself without the federal credit.
Solar Tile Roof savings offers
We offer two ways to lower the cost of a solar tile roof (they can’t be combined):
- 10% Show Home Discount for homeowners with no existing Solar Tile Roof within 75 miles.
- Price Match of up to 20%, matching the price of a top-rated roof combined with top-rated monocrystalline solar panels.
See the details on our Discount Savings Incentives page.
What the Change Means for Solar Roofs and Solar Tiles
The end of the credit narrows the price gap between solar panels and a solar roof. Under the old credit, only the solar-generating part of a solar roof qualified, while panels qualified almost in full. In 2026, neither gets a federal credit, so the comparison comes down to total cost, appearance, and the condition of your roof.
If your roof needs replacing soon, compare the full picture
An asphalt roof typically lasts 15 to 20 years. Solar panels last 25 to 30. If you put panels on an aging roof, you will likely pay to remove and reinstall them when the roof fails, a job industry estimates put at roughly $1,500 to $9,000 or more, according to Interlock Roofing.
A solar tile roof avoids that cycle. It replaces your roof and generates power in one installation, so there is no rack to remove later. The fair comparison is:
- New roof + rack-mounted panels, versus
- One integrated solar tile roof that does both jobs.
What Solar Tile Roof brings to the comparison
Our Modern Slate solar tile is a lightweight synthetic slate roof tile with built-in solar cells:
- 26 watts per active tile at 21.5% module efficiency, using back-contact cells
- 50-year limited roof tile product warranty
- Output guarantee of 90% at 15 years, 85% at 25 years, and 80% at 40 years
- Class 4 impact and Class A fire ratings
See the full specs on our Solar Tile Roof product page and warranty page.
Is solar still worth it in 2026?
For many homeowners, yes, but the math is tighter. Without the credit, payback takes longer, so these factors matter more:
- Your electricity rate. The higher it is, the faster solar pays off.
- Your sunlight and roof orientation. South and west-facing roofs produce the most.
- Your roof’s age. If it needs replacing within 10 years, combining roofing and solar avoids paying twice.
- Your state’s incentives and net metering rules.
A project-specific quote is the only way to know your real numbers.
Solar Tax Credit FAQ
Is there still a federal solar tax credit in 2026?
Not for homeowners who buy their system. The Residential Clean Energy Credit ended for installations completed after December 31, 2025. Leased and PPA systems may still benefit indirectly through the commercial credit.
Did Trump cancel the solar tax credit?
The homeowner credit was ended by the One Big Beautiful Bill Act, which Congress passed and President Trump signed on July 4, 2025. The law moved the end date from 2034 to December 31, 2025.
Who qualifies for the 30% solar tax credit now?
Homeowners whose installation was completed by December 31, 2025 can claim it on their 2025 return. For new systems, only third-party owners of leased or PPA systems can claim a 30% credit, under the commercial credit’s deadlines.
I paid in 2025, but my system was installed in 2026. Do I qualify?
No. The IRS treats the expense as made when installation is completed, not when you pay.
Is the solar tax credit refundable?
No. It reduces the federal tax you owe but does not create a refund on its own. Unused credit from a qualifying installation can generally be carried forward to future years.
Can I claim the solar tax credit twice?
Through 2025, you could claim it in each year you made new qualifying solar expenses. Because the credit has ended, there are no new qualifying expenses in 2026 or later. You can still use a carryforward from an earlier year.
Do solar batteries qualify for a tax credit in 2026?
Not when the homeowner owns them. Batteries owned by a third party, such as a leasing company, can still qualify for the commercial credit, which for storage runs through 2033 before phasing down.
Does a solar roof qualify for a tax credit in 2026?
No federal credit applies to a solar roof installed in 2026, just as with panels. State and local incentives may still apply.
Will the solar tax credit be extended or come back?
As of October 2026, no extension or replacement has become law. Congress could change the rules in the future, so check for updates before you buy. We review this page regularly.
Get Real 2026 Numbers for Your Solar Roof
The tax credit is gone, but the case for a roof that produces its own power is not. If your roof is due for replacement, a solar tile roof lets you pay for one project instead of two, with no racks to remove later and a 50-year roof tile warranty behind it.
And with our Price Match of up to 20%, you don’t have to pay more than a top-rated roof plus premium solar panels would cost.
Tell us about your home, and we’ll send project-specific pricing and connect you with a certified Solar Tile Roof installer in your area.
Get Your Free Solar Roof Pricing
This article is for general information only and is not tax advice. Tax rules can change. Talk to a qualified tax professional about your situation.
