⚠️ Short answer: there is no federal residential solar tax credit for systems installed in 2026. The IRS is explicit: "You can't claim residential clean energy credits for expenditures made after December 31, 2025." The cut-off comes from the One Big Beautiful Bill (OBBBA, Public Law 119-21, signed July 4, 2025).
If your system was installed on or before December 31, 2025, you can still claim 30% on your 2025 return with Form 5695. The IRS ties the credit to the year the property is installed, not the year you paid a deposit. See which state and utility incentives are still running →
The Residential Clean Energy Credit (Section 25D), the one most people call the solar ITC, paid back 30% of a home solar system's cost as a credit against federal income tax. The Inflation Reduction Act had scheduled it at 30% well into the 2030s. That schedule no longer exists: the One Big Beautiful Bill ended the credit for expenditures made after December 31, 2025.
So the search for "solar tax credit 2026" has two very different answers depending on one date. Finished the install by New Year's Eve 2025? You are still owed the credit, and the rest of this page shows how it is claimed. Installing now? The federal piece is gone, and what remains is state programs and utility rebates, which vary a lot by address.
For scale, on a $25,000 system installed in 2025 the credit is worth $7,500 (30%).
| Cost | Counts? | Detail |
|---|---|---|
| Solar panels / modules | Yes | New equipment only. The IRS excludes used (previously owned) property |
| Inverter, wiring, mounting hardware | Yes | Part of the solar electric property |
| Installation labor | Yes | Labor to install the qualifying equipment |
| Battery storage | Yes | Capacity must be at least 3 kWh |
| Public utility rebates or subsidies | Subtract first | Taken off qualified expenses before the 30% is applied |
| Net metering credits | No effect | Payments for power sold back to the grid don't change qualified expenses |
| When the expenditure is made | Federal residential credit | Basis |
|---|---|---|
| 2022 – December 31, 2025 | 30% | Inflation Reduction Act |
| After December 31, 2025 | None | One Big Beautiful Bill (Public Law 119-21) |
Not for new installations. The IRS says you can't claim residential clean energy credits for expenditures made after December 31, 2025. Systems installed on or before that date can still be claimed at 30% on a 2025 return.
Form 5695, Part I. Solar costs go on Line 1, the credit allowed is on Line 15 and any carryforward to 2026 on Line 16.
Yes. Public utility subsidies come off your qualified expenses first. Net metering credits don't.
No. The IRS excludes used (previously owned) clean energy property.
It is non-refundable, so it only reduces tax owed. The unused part carries forward to 2026 on Line 16.
Sources: IRS, Residential Clean Energy Credit (expiry, installation year, used property, battery capacity, utility subsidies); IRS, Instructions for Form 5695 (2025) (line numbers, expenditures after December 31, 2025). Checked October 2, 2026.
Before you spend money on this. Energy Rebate Calculator is an independent website. It is not affiliated with, endorsed by, or operated by the U.S. Department of Energy, the IRS, or any state agency, and nothing on this page is an offer, an application, or a promise of payment.
The federal HOMES and HEAR rebates are administered state by state and most states have not launched them. Tax credits, rebate amounts and eligibility rules change without notice, and rebates are generally not paid for work completed before a programme launches.
Confirm your eligibility and the current terms with the administering agency before you sign a contract or buy equipment. Check the status in your state. If you spot something out of date here, tell us and we will correct it.