Residential Solar Tax Credit Ended in 2025: What Homeowners Need to Know for 2026

For years, homeowners installing rooftop solar could claim the Residential Clean Energy Credit — worth 30% of a system's cost — directly off their federal tax bill. That credit expired after December 31, 2025 under the One Big Beautiful Bill Act (OBBBA), signed into law in July 2025. If you're considering solar in 2026, here's the plain fact: there is currently no federal tax credit for residential solar installations. This article explains exactly what changed and what still applies.

What Was the Residential Clean Energy Credit?

Under Internal Revenue Code Section 25D, homeowners could claim a nonrefundable federal tax credit equal to 30% of the cost of qualifying solar, battery storage, and geothermal installations on a primary or secondary residence, with no dollar cap.

What Changed

The OBBBA eliminated Section 25D for property placed in service after December 31, 2025. Practically, that means: if you install a residential solar or battery system in 2026 or later, you will not receive a federal tax credit for it. This is a significant change from the tax treatment homeowners may remember from recent years, and it's easy to miss if you're relying on outdated advice or old marketing materials.

What This Does NOT Affect

• Commercial solar tax credits. Businesses installing solar under separate provisions of the tax code — unrelated to Section 25D — still have their own incentives. That's a different situation from a homeowner's personal residence and isn't covered by this expiration.
• State and utility incentives. Some states, municipalities, and utility companies continue to offer their own rebates, tax credits, or net-metering programs for residential solar, independent of the federal credit. These vary widely by location — check with your state energy office or utility before assuming there's no incentive at all.

What Homeowners Considering Solar in 2026 Should Do

1. Get quotes based on the full, unsubsidized cost of the system — don't let an installer's sales pitch assume a federal credit that no longer exists.
2. Ask your state energy office, local utility, or municipality directly what rebates or incentives, if any, are currently available in your area.
3. Run the numbers on payback period and electricity savings without the federal credit to see if solar still makes financial sense for your situation.
4. Be skeptical of any solar sales material still advertising "30% off with the federal tax credit" for a 2026 installation — that credit no longer applies to residential systems.

Frequently Asked Questions

If I signed a solar contract in 2025 but installation happens in 2026, do I still get the credit? The credit generally applies based on when the system is "placed in service" (operational), not when you signed the contract — installations completed after December 31, 2025 do not qualify. Confirm your specific timeline with a tax professional.

Is there any federal incentive left for homeowners at all? Not under Section 25D as of 2026. It's still worth checking for other, unrelated federal, state, or utility programs, since energy incentive rules change and vary by location.