Is the Solar Tax Credit Gone in 2026? Yes — Here's What Survived
The short version: the Residential Clean Energy Credit (Section 25D) — the 30% federal tax credit homeowners claimed on purchased solar and battery systems — ended for systems placed in service after December 31, 2025. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, terminated it roughly a decade early. The 25C credit for efficiency improvements (heat pumps, windows, insulation) ended on the same date.
Not tax advice
This page summarizes public law changes as of June 2026 for orientation. Tax situations differ — confirm specifics with a tax professional, especially around in-service dates and third-party-ownership structures.
What this means in practice
- Bought and operational by Dec 31, 2025? You can still claim the credit when filing — the termination applies to systems placed in service after that date.
- Buying with cash or loan in 2026? No federal credit. Sticker price is real price, which is why state and utility programs now decide where batteries make sense.
- Leases and PPAs are the loophole everyone's using. The commercial Investment Tax Credit (Section 48E) survived for third-party-owned systems. When a company owns the system on your roof and leases it to you, they claim the credit and typically pass part of it through as lower payments. The trade-offs are real: lease vs buy in 2026.
Why prices haven't fully "absorbed" the change
Industry watchers expected hardware prices to drop to offset the lost credit. Through mid-2026 the adjustment has been partial: battery hardware (especially portable/modular systems) keeps getting cheaper on its own cost curve, while installed-system quotes have compressed less. Practical consequences:
- The relative value of portable and semi-installed modular systems improved — no credit ever applied to your $800 power station, so nothing was lost.
- Quote competition matters more than ever for installed systems — the ±30% installer spread used to hide behind the credit; now it's naked. Get multiple quotes (EnergySage makes this painless).
Decision framework for 2026
- Resilience only (outages, no daily cycling): portables and modular systems win harder than before — size your needs.
- Daily-cycling economics (time-of-use arbitrage, solar self-consumption): run the math with your utility's actual rates; our no-solar analysis shows worked examples.
- Whole-home with strong state programs (CA, MA, CT...): installed systems still pencil — check your state, then decide lease vs buy.