No. The 30% federal solar tax credit 2026 status for homeowner-owned systems is that it expired on December 31, 2025. The One Big Beautiful Bill Act ended Section 25D nearly seven years early, though third-party-owned lease and PPA systems can still pass through a related commercial credit.
What Happened to the Federal Solar Tax Credit
For years, homeowners asking whether the federal solar tax credit was still active could count on a simple answer: yes, at 30%, through 2032. That changed with the One Big Beautiful Bill Act, signed July 4, 2025, which repealed Section 25D of the tax code, formally called the Residential Clean Energy Credit.
Under the original Inflation Reduction Act schedule, the credit was set to hold at 30% through 2032, step down to 26% in 2033, and drop to 22% in 2034 before disappearing. The OBBBA cut that timeline off entirely. If you are trying to understand your total project cost without that credit, the math on a typical system has shifted noticeably.
When Did the Solar Tax Credit End
The cutoff is specific and matters for anyone asking when does the solar tax credit end. According to IRS guidance on Form 5695, a system counts as placed in service, not just contracted or paid for, when it is fully installed and operational. That means:
- Systems placed in service on or before December 31, 2025 still qualify for the 30% credit under Section 25D.
- Systems placed in service on or after January 1, 2026 receive $0 in federal residential credit.
- A signed contract or a deposit made in 2025 does not lock in the credit if the system was not operational by the deadline.
This is one of the most common points of confusion homeowners run into when comparing a solar lease versus a solar loan, since ownership structure now directly affects whether any federal credit applies at all.
Section 25D Residential Clean Energy Credit: What It Covered
The section 25D residential clean energy credit applied to a range of home clean energy upgrades, not just rooftop panels:
| Property Type | Covered Under Section 25D | 2026 Status |
| Owned solar panels | Yes | Expired |
| Battery storage (3+ kWh) | Yes | Expired |
| Solar water heaters | Yes | Expired |
| Small wind turbines | Yes | Expired |
| Geothermal heat pumps | Yes | Expired |
| Leased or PPA solar systems | No (installer claims a separate credit) | Still possible via installer |
Can I Still Claim the Solar Tax Credit in 2026
If you are asking can I still claim solar tax credit 2026 for a system you own outright, the honest answer is no. Section 25D does not apply to any residential system placed in service after December 31, 2025, with no phase-down and no grace period.
There is one narrower exception. If you installed and completed your system before the end of 2025 but have not yet filed, you can still claim the solar tax credit for systems installed in 2025 on that year’s tax return using IRS Form 5695. That filing window is separate from when the physical work happened.
Commercial Solar Tax Credit 48E Still Exists
Homeowner-owned systems lost their credit, but the commercial solar tax credit 48E did not disappear. Section 48E remains available for third-party-owned solar, meaning leases and power purchase agreements where the installer or financing company owns the equipment and passes part of the value through to the homeowner, usually as a lower monthly payment rather than a lump-sum credit.
There is a real solar tax credit deadline of 2026 attached to this path too. Per the Department of Energy’s summary of the credit rules, construction generally needed to begin by July 4, 2026, to qualify for the extended placed-in-service window.
Systems that met that construction start date get up to four years to be completed and placed in service, while Section 48E itself terminates for solar facilities placed in service after December 31, 2027.
Large lease and PPA providers like Tesla Energy are among the companies positioned to pass part of this credit through, though the terms of a Tesla solar contract still determine how much of that value actually reaches the homeowner.
If you are weighing a lease against ownership now that the math has changed, it’s worth reviewing the hidden costs that can show up in a solar contract before assuming a lease automatically comes out ahead.
Solar Tax Credit for Leased Panels in 2026
The solar tax credit for leased panels in 2026 works differently than the credit homeowners used to claim directly. The installer or financing company claims the Section 48E credit and, in theory, prices that savings into your monthly payment. In practice, how much of that value actually reaches the homeowner varies by company and contract terms.
This is also where escalator clauses matter more than ever. Companies like Sunrun, one of the largest residential lease and PPA providers, structure many of their solar agreements with built-in annual payment increases, and any savings passed through from the 48E credit can be offset over time by those rising payments, which is worth calculating before signing anything new in 2026.
State Solar Incentives After the Federal Credit Expires
State solar incentives after the federal credit expires are now the main lever homeowners have left, and most of them survived the OBBBA changes since they operate independently of federal tax law:
- State tax credits and rebates, which vary widely by state
- Net metering and net billing programs through your utility
- Solar Renewable Energy Certificate (SREC) markets in states that have them
- Property tax exemptions for the added home value from solar
- Utility-specific rebate programs, often layered on top of state programs
Homeowners financing a system through a loan should also understand how federal lending disclosure rules under TILA apply, since a state incentive does not change your obligations under the loan itself.
Federal Solar Tax Credit 2026 Timeline at a Glance
Between the OBBBA signing date, the placed-in-service cutoff, and the separate commercial construction deadline, it’s easy to lose track of which date applies to your situation. Here is the federal solar tax credit 2026 timeline in order:
- July 4, 2025: The One Big Beautiful Bill Act is signed, repealing Section 25D ahead of schedule.
- December 31, 2025: Last day a homeowner-owned system can be placed in service and still qualify for the 30% Section 25D credit.
- January 1, 2026: Section 25D drops to $0 for all newly placed-in-service owned residential systems, with no phase-down.
- July 4, 2026: Deadline for third-party owned projects to begin construction and qualify for the extended Section 48E placed-in-service window.
- December 31, 2027: Section 48E terminates for solar facilities placed in service after this date, regardless of ownership structure.
Keeping these dates straight matters most for anyone currently comparing quotes, since a sales presentation written before mid-2025 may still reference incentive numbers that no longer apply.
Did the Solar Tax Credit Expire for Everyone
Not exactly. Did the solar tax credit expire is really two separate questions: for owned residential systems, yes, completely. For businesses and third-party owned residential systems, a version of it survives through 2027 under different rules.
That distinction is the single most misunderstood part of the OBBBA change, and it’s why solar tax credit OBBBA searches spike every time a homeowner gets a quote that doesn’t match what they remember reading a year ago.
What This Means If You’re Already in a Solar Contract
If you signed a contract expecting a tax credit that no longer applies to your situation, or you’re unsure whether your system was placed in service before the deadline, reviewing your solar agreement with someone familiar with cancellation and contract terms is a reasonable next step before assuming there’s nothing you can do.
Get Help With Your Solar Contract Today
Solar Equity Solutions is BBB accredited and has helped homeowners review or exit more than 5,000 solar contracts, working directly with every major solar company in the industry. If the federal solar tax credit 2026 change has left your numbers looking different than what you were promised, that experience can help you figure out what options are actually available to you.
Frequently Asked Questions
Is the solar tax credit still active in 2026?
No, not for homeowner-owned systems. Section 25D expired December 31, 2025, and there is no federal residential credit for systems placed in service in 2026.
Did the solar tax credit expire completely?
It expired for owned residential systems. A related commercial credit under Section 48E still applies to leases and PPAs through 2027.
When does the solar tax credit end for good?
For homeowner-owned systems, it already ended on December 31, 2025. For third-party-owned systems, Section 48E is scheduled to terminate for solar facilities placed in service after December 31, 2027.
Can I still get any solar tax credit in 2026?
Only indirectly, through a lease or PPA where the installer claims Section 48E, or if your owned system was completed and placed in service in 2025 and you haven’t filed yet.
What replaced the federal solar tax credit for homeowners?
Nothing replaced it directly at the federal level. State tax credits, net metering, SREC markets, and utility rebates are now the main incentives left.
This article is for informational purposes only and does not constitute legal or tax advice. Consult a licensed tax professional about your specific filing situation.