Every claim on this page checked against primary sources on July 28, 2026

The federal solar tax credit in 2026

What the law actually says now

The operative sentence is one line long, and it is the whole of the change for a homeowner:

Before that amendment, § 25D was scheduled to pay 30% through 2032 and then step down through 2034. The July 2025 law deleted the schedule and substituted a single date nine years earlier. Nothing was phased; the credit simply stops.

"Expenditures made" does not mean when you paid

This is the sentence that decides most real cases, and it is in a different subsection from the one everybody quotes:

So the date that matters is the date the installation was finished, not the date of the contract, the deposit, the final payment, or the permit. The IRS addressed the point head-on when it was asked whether paying early helps: if installation is completed after December 31, 2025, the expenditure is treated as made after that date, which prevents the taxpayer from claiming the credit. IRS FS-2025-05, Aug. 21, 2025

The 2025 form instructions, published in January 2026, put both credits in one sentence and are the most recent federal statement of the rule:

Everything § 25D covered went at the same time

"The solar credit" is shorthand. Section 25D was a single credit covering six categories of residential energy property, and the termination in subsection (h) is written against the section, not against solar. All six are gone on the same date.

Home batteries are the one people most often assume survived, because battery incentives are visibly alive at the state level and because storage genuinely did keep a federal life of its own — but only on the commercial side, under § 48E. A homeowner buying a battery outright in 2026 claims no federal credit for it.

The efficiency credit died the same day

Section 25C — the Energy Efficient Home Improvement Credit, covering insulation, windows, exterior doors, heat pumps, panel upgrades and home energy audits — was terminated on the same schedule by the same law. Note that its termination sits at subsection (i), and that it is written against property placed in service rather than expenditures made:

The part almost nobody is telling 2025 buyers: the carryforward

Section 25D was always non-refundable. It could reduce your tax to zero but not below it, and any excess rolled forward. The repeal did not touch that mechanism — it terminated new expenditures, not the treatment of a credit already determined:

The IRS says the same thing in operational terms in the instructions published this January, and the second sentence is the one that costs people money when they miss it:

Read that against who actually installed solar in the last quarter of 2025: a rush of buyers racing a deadline, a meaningful share of them retirees and others with modest federal tax liability, on systems whose 30% credit routinely ran to five figures. Those are precisely the taxpayers who cannot absorb the credit in one year. The instruction is explicit that the form still gets filed in that situation — filing is what preserves the unused amount. A 2025 return that skipped Form 5695 because "the credit was useless this year" left the carryforward undocumented.

Which situation are you in?

What did not change

Nothing in the July 2025 law touched state tax credits, state and utility rebates, sales and property tax exemptions, net metering, or SREC markets. Those programs are set by state legislatures and public utility commissions, they survived intact, and in most states they are now the entire case for or against a system. They also move mid-year without announcement, which is why every program on this site carries the date we last read it.

Start with your state — that is where the remaining money is. If you are weighing how to finance a system, buying versus leasing in 2026 works through the federal flip and the ownership rules that cut against it.

The other credits on the same law's clock

The budget law accelerated several terminations at once, on three different dates. If you are planning more than solar, the dates do not line up:

Two of those are still open as of this page's verification date and close on June 30, 2026 — the EV charger credit and the builder credit — so a household combining projects should not assume the solar date applies to everything.

Why a credit was repealed while state programs kept paying

Worth saying plainly, because it explains why the answer to "is solar still worth it" did not become uniformly no. The federal credit was a single line of the Internal Revenue Code and one act of Congress removed it. State incentives are hundreds of separate statutes, tariffs and commission orders, administered by agencies and utilities that were not party to the federal decision. Some of them have since been narrowed, several have new funding, and at least one that national sites still describe as an open rebate has quietly become an income-qualified lottery. None of that is visible from a page written about the federal credit, which is the entire reason this site is organized by state.