Tax information, not tax advice. This article describes published IRS rules as of 8 September 2026. It is not advice about your tax return, and whether any of it applies to you depends on facts we do not have. Ask a qualified tax professional.
What replaced the federal residential solar tax credit in 2026?
Nothing did. The 30% Residential Clean Energy Credit under Section 25D is no longer available for home solar installed after 31 December 2025, and the IRS does not describe a replacement residential credit. What a homeowner has in 2026 is a set of separate, mostly state-level things: incentive programs, utility programs, net metering, and the tax treatment of the equipment itself. None of them is a successor to 25D, and none of them behaves like it.
What the IRS actually says
Two IRS sources, and they agree in slightly different words. The Residential Clean Energy Credit page states:
"The credit is not available for any property placed in service after December 31, 2025."
The IRS FAQ on the changes made by Public Law 119-21 states:
"The credit will not be allowed for any expenditures made after December 31, 2025."
The date that matters is the installation date
This is the detail that catches people. The same IRS FAQ explains that an expenditure is treated as made when the original installation of the item is completed. So the controlling date is not when you signed, not when you paid a deposit, and not when the panels were delivered — it is when the installation was finished. A deposit paid in 2025 on a system commissioned in 2026 does not qualify.
What exists instead, and why it is not the same thing
Four separate considerations. They are worth understanding individually, because a quote that lumps them together is hard to check.
- State incentive programs. New Jersey and Pennsylvania run their own, and they work differently from a tax credit — typically paying on the electricity your system generates rather than reducing what you pay for it.
- Utility programs. Specific to your utility, and they change independently of anything federal or state.
- Net metering. Not an incentive at all. It is the billing arrangement that credits the power you export against the power you draw.
- Ownership structure. Whether you own the system or a third party does changes who can claim what. This is the one most often misdescribed.
A lease or a PPA does not give you back the credit
If a third party owns the system on your roof, that company may be able to claim tax benefits available to a business. That is not you claiming Section 25D, and it does not follow that the value reaches you. Financing structures are not interchangeable, and any claim that a particular product "still gets you the 30%" is a claim to put in front of your own tax professional before you sign.
Questions people are asking
Is the 30% federal solar tax credit gone?
For home solar installed after 31 December 2025, yes. The IRS states the credit "is not available for any property placed in service after December 31, 2025."
I signed a contract in 2025 but the system goes in this year. Do I qualify?
No. The IRS treats the expenditure as made when the original installation is completed, so an install finished in 2026 falls after the cut-off regardless of when the contract was signed.
Is there a new federal credit for homeowners?
The IRS does not describe one. If you are told otherwise, ask which section of the tax code it sits under.
Does this affect the value of going solar?
It changes the arithmetic and does not settle it. State incentives, net metering and what you currently pay for electricity are all still in play, and they vary by state and by utility.
Should I still get quotes?
Yes, but compare them on scope rather than on a headline number, and be careful with any quote whose savings still assume a 30% federal credit. That assumption is out of date.
Sources
- IRS — Residential Clean Energy Credit
- IRS — FAQs for modification of sections 25C, 25D and others under Public Law 119-21
How we checked this
Both IRS pages were read directly on 8 September 2026 and the statements above are quoted from them. We did not use a third-party summary of the rule as a source. Where the IRS page carries older phase-out language that predates the 2025 termination, we have not repeated it — the termination sentence is the controlling statement.
Facts last checked: 8 September 2026. Next review: 8 December 2026.
Spotted something wrong? Tell us and we will check it against the source and correct it: send a correction.