Is there still a federal solar tax credit in 2026?

Not for homeowners who buy. Section 25D, the 30% residential credit, expired December 31, 2025, so cash and loan buyers get $0 federal credit in 2026. The commercial credit (Section 48E) survives, but only a business that owns the panels — like a lease or PPA provider — can claim it.

Does solar still make sense without the tax credit?

Often, yes — but the margin is thinner. In high-rate, high-sun states an owned system still breaks even and saves for decades. Losing the credit adds roughly 3 to 5 years to payback, so the decision is now much more sensitive to your electricity rate and sun. Run your real numbers before deciding.

Why can a lease still get the federal credit when I can't?

With a lease or PPA the provider owns the equipment and claims the commercial 48E credit plus depreciation. They price your monthly payment to pass part of that value back to you, which is why third-party ownership is now the only residential channel where any federal subsidy still flows.

Solar in 2026 — Life After the Tax Credit

What changed when the 30% federal residential solar credit (Section 25D) expired on December 31, 2025 — and whether solar still pays off in 2026.

Quick answer

The 30% federal residential solar credit (Section 25D) expired December 31, 2025, so if you buy solar in 2026 with cash or a loan your federal credit is $0. A $24,000 system that effectively cost $16,800 under the old credit now costs the full $24,000 — adding roughly 3 to 5 years to payback.

What changed on January 1, 2026

Section 25D — the Residential Clean Energy Credit — was the 30% federal credit that homeowners had leaned on for a decade. It expired at the end of 2025. Any system placed in service in 2026 or later gets $0 from it if you own the panels.

There is no successor residential credit, so budget as if the federal subsidy for owned home solar is simply gone. If you owned and energized a system by December 31, 2025, you can still claim the 30% credit on your 2025 return — only 2026 installations are cut off.

This is the biggest shift in home-solar economics in years, and a lot of advice still circulating quotes the old 30% number. Treat any source promising a federal credit for a 2026 purchase as out of date.

How each way of paying changes the math

The credit didn't vanish for everyone — it moved. Cash and loan buyers own the system and now get nothing back federally, so they pay the full sticker. A lease or PPA provider owns the panels instead, and can still claim the commercial credit (Section 48E) plus depreciation.

Because the provider captures that value, they can price it into your monthly payment, which is why $0-down lease and PPA offers are everywhere in 2026. The trade-off is that you never own the asset and your lifetime savings are smaller than buying.

So the buy-vs-lease decision is no longer automatic. Our lease-vs-buy guide walks through the contract terms and escalators; the table below is the fast version.

Does solar still pay off in 2026?

Losing the credit stretches payback, but it doesn't erase the case. In high-electricity-rate, high-sun states, an owned system still breaks even and then saves for the rest of its 25-plus-year life. In low-rate or low-sun markets, the math is now much tighter and worth checking before you sign.

The one rule that matters is to run your real numbers instead of a rule of thumb. The solar cost calculator at /solar/cost already bakes in the $0 federal credit for cash and loan buyers, so the payback it shows is the one you'll actually get. From there, the guides in this hub go deeper on the tax rules, lease vs. buy, and cost by system size.

How you pay for solar in 2026 — who claims the federal credit and what it does to payback
Buyer type	Federal credit (2026)	Who owns the system	Effect on payback
Cash	$0 — Section 25D expired	You	Full sticker price; payback runs roughly 3–5 years longer than it did under the old credit
Loan	$0 — Section 25D expired	You	Full sticker plus loan interest; the longest payback of the three, but you keep 100% of savings after
Lease	Section 48E — claimed by the provider	The provider	$0 down and immediate bill savings, but smaller lifetime savings and no ownership payback
PPA	Section 48E — claimed by the provider	The provider	You pay a per-kWh rate below your utility; savings start day one, but you never own the system

Guides in this topic

After the tax credit

Solar Tax Credit in 2026: What's Left After 25D Expired

The 30% federal solar tax credit (25D) expired December 31, 2025. Here's what that means for cash and loan buyers in 2026, and how the 48E credit still applies to leases and PPAs.

Updated June 30, 2026

After the tax credit

Solar Incentives & Taxes by State in 2026: What's Left

The 30% federal solar credit (25D) expired Dec 31, 2025. In 2026 your savings come from a state-by-state patchwork: tax credits, rebates, SRECs, and exemptions.

Updated June 30, 2026

After the tax credit

Is Solar Worth It in 2026? An Honest Answer

With the 25D federal tax credit gone, is home solar still worth it in 2026? Here's the math on payback, the lease vs. buy shift, and when it pays off.

Updated June 30, 2026

Frequently asked questions

Is there still a federal solar tax credit in 2026?: Not for homeowners who buy. Section 25D, the 30% residential credit, expired December 31, 2025, so cash and loan buyers get $0 federal credit in 2026. The commercial credit (Section 48E) survives, but only a business that owns the panels — like a lease or PPA provider — can claim it.
Does solar still make sense without the tax credit?: Often, yes — but the margin is thinner. In high-rate, high-sun states an owned system still breaks even and saves for decades. Losing the credit adds roughly 3 to 5 years to payback, so the decision is now much more sensitive to your electricity rate and sun. Run your real numbers before deciding.
Can I still claim the credit if I installed solar in 2025?: Yes. If your system was owned and placed in service — energized — by December 31, 2025, you can still claim the 30% credit on your 2025 tax return. Only systems placed in service in 2026 or later are excluded.
Why can a lease still get the federal credit when I can't?: With a lease or PPA the provider owns the equipment and claims the commercial 48E credit plus depreciation. They price your monthly payment to pass part of that value back to you, which is why third-party ownership is now the only residential channel where any federal subsidy still flows.