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The Federal Solar Tax Credit Ended - What It Means for Installing in 2026

Updated June 28, 2026 · By HelioRoofer Editorial

If you’re planning a solar installation in 2026, the biggest recent change isn’t technical - it’s financial. The federal tax credit that took 30% off a purchased system is gone. Here’s what that means for installing now.

What changed

The Residential Clean Energy Credit (Section 25D) - the 30% credit homeowners claimed when they bought a system with cash or a loan - expired December 31, 2025. There’s no phase-down: a system purchased and installed in 2026 doesn’t get it.

To have qualified, a system had to be installed and operational by the end of 2025. Many installers saw a rush of cash-and-loan projects late in 2025 for exactly this reason.

The exception: leases and PPAs

The credit that ended applies to systems you own. A separate commercial credit - Section 48E - still applies to third-party-owned systems (leases and PPAs), where the provider claims it and lowers your payment. As of 2026, that remains available, so a federal benefit still reaches homeowners indirectly through TPO financing.

What it means for installing in 2026

  • Buying still gives the most lifetime value, but your upfront/effective cost is higher without the credit - so the payback is longer.
  • Lease/PPA is worth comparing now that it’s the main route to a federal benefit.
  • State and local incentives are unaffected and still matter - check yours.
  • Beware stale sales pitches still advertising “30% federal credit” on a 2026 purchase. Ask every installer to put incentive claims in writing - see how to choose an installer.

Does it still make sense to install?

Often yes - especially where electricity is expensive - it’s just a longer-term investment than it was in 2025. Run your own numbers on installation cost and confirm which financing fits.

Bottom line

The 30% purchase credit ended Dec 31, 2025. Installing in 2026 means doing the math without it - while leases/PPAs keep a federal benefit via Section 48E. Verify any incentive claim before you sign.

Policy snapshot as of June 2026 - not tax advice. Confirm current federal, state, and utility incentives for your situation.

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