Federal · expired
The 30% Federal Solar Tax Credit Ended for 2026 Purchases
Homeowners who researched solar in the past expect a 30% tax rebate to offset their purchase. Under Public Law 119-21 (OBBBA), Section 25D generally does not apply to expenditures made after December 31, 2025.
Why did the federal solar tax credit end?
Under the One Big Beautiful Bill Act (OBBBA / Public Law 119-21), signed July 4, 2025, the Residential Clean Energy Credit (Section 25D) was terminated for expenditures made after December 31, 2025. The prior multi-year phase-down schedule does not apply to post-2025 expenditures. Confirm details on IRS FAQs for OBBB.
How solar leasing is pitched in 2026
While residential 25D is gone for new homeowner purchases, commercial investment credit pathways (e.g., Section 48E for third-party-owned systems) may still appear in lease/PPA pricing — subject to their own deadlines and safe-harbor rules. Cash buyers should not assume a 30% federal rebate. Get ownership structure and credit assumptions in writing.
Common myths
- The credit steps down to 26% later this decade (False for typical 2026 residential purchases — 25D terminated for post-2025 expenditures).
- Signing a contract in 2025 guarantees the credit even if install finishes in 2026 (Generally false — installation completion timing controls).
Frequently asked questions
Common solar questions for this area — start a project for answers tied to your roof and utility bill.
Can I claim the solar tax credit if I sign a contract in 2026?
Generally no for a homeowner-owned cash or loan purchase if installation completes after Dec 31, 2025. Contract date alone does not save the credit. Confirm with a tax advisor.
Does SolarFlow still apply a 30% ITC to ROI?
No. SolarFlow’s 2026 planning model treats federal residential ITC as 0% for homeowner-owned systems unless you explicitly model otherwise with an advisor.
Not applicable for most 2026 installs. Prior-year eligible claims used IRS Form 5695. Carryforward rules for unused prior credits may still apply — consult a tax advisor. SolarFlow is not a tax advisor.