Solar Panel Rebates & Incentives 2026: What's Left After OBBB
The federal solar incentive picture changed dramatically at the end of 2025. The One Big Beautiful Bill, signed into law in late 2025, terminated the Section 25D residential solar and battery tax credit effective December 31, 2025. Panels installed from January 1, 2026 onward receive no federal tax credit. The 30% credit that had been in place — worth an average of $6,000–$9,000 on a typical residential installation — is simply gone.
That is the bad news. The good news is that solar still makes financial sense in most of the country, and there are meaningful state-level programs, net metering policies, and SREC markets that keep the economics positive. This guide covers exactly what remains and what it means for your decision to go solar in 2026.
If you are thinking about home energy upgrades more broadly, the federal programs that survived — HOMES ($4.3B) and HEAR ($4.5B) — are focused on electrification and whole-home efficiency rather than solar. Use our energy rebate calculator to see what you qualify for on non-solar improvements.
The 25D Solar Tax Credit Is Gone
Section 25D of the Internal Revenue Code provided a 30% nonrefundable tax credit for residential solar photovoltaic systems, battery storage, and geothermal heat pumps. It was scheduled to run through 2034. The One Big Beautiful Bill moved the expiration date up to December 31, 2025.
What this means in practice:
- Installed before December 31, 2025: You claim the 30% credit on your 2025 tax return. The credit is fully available.
- Installed January 1, 2026 or later: No federal tax credit. Zero. No partial credit, no phase-out period.
- Battery storage: Also expired. Standalone battery systems and solar-plus-storage added in 2026 receive no 25D credit.
- Geothermal heat pumps: The 25D credit covered these too. They are now ineligible for the federal credit, though the HEAR program provides a separate $8,000 direct rebate for geothermal heat pumps (income-dependent).
There is currently no legislation in Congress with meaningful momentum to restore the 25D credit. If you were waiting for the “right time” to go solar, the right time under federal incentives was before the end of 2025.
What Solar Incentives Remain in 2026
The expiration of the 25D credit does not mean solar is without incentives. It means the incentive landscape shifted from federal to state and utility-level programs. Here is what still exists:
| Incentive Type | Federal? | Still Available 2026? | Typical Value |
|---|---|---|---|
| 25D Tax Credit (solar) | Yes | No — expired 12/31/2025 | Was 30% of system cost |
| State solar tax credits | No | Yes (in ~15 states) | 10–25% of system cost |
| State rebate programs | No | Yes (in select states) | $500–$5,000 |
| Net metering credits | No | Yes (most states) | Ongoing bill reduction |
| Solar Renewable Energy Credits | No | Yes (SREC states) | $20–$300+ per MWh |
| Utility rebates | No | Yes (select utilities) | $200–$1,000 per kW |
| Property tax exemptions | No | Yes (many states) | Prevents tax increase on home value |
| Sales tax exemptions | No | Yes (some states) | 5–10% of equipment cost |
State Solar Incentive Programs
Roughly 15 states have their own solar tax credits or rebate programs that exist independently of the federal 25D credit. The most significant:
New York
NY-Sun Megawatt Block program provides capacity-based incentives through NYSERDA, currently ranging from $0.05–$0.40/W depending on system size and location. A 6kW system gets roughly $300–$2,400 from the Megawatt Block. New York also offers a 25% state solar tax credit up to $5,000. For New York homeowners, the state credit partially offsets the lost federal credit. Combined with net metering, solar payback periods in NY remain reasonable at 8–11 years.
California
California’s main solar program is net metering (NEM 3.0 as of April 2023), which reduced solar compensation rates significantly from the original NEM rules. The Self-Generation Incentive Program (SGIP) provides rebates for battery storage but not solar panels directly. DAC-SASH (Disadvantaged Communities Single-family Solar Homes) provides $3/W subsidies for low-income households. For most California homeowners, the economics rely primarily on net metering and electricity rate avoidance rather than upfront rebates.
Massachusetts
Massachusetts SMART (Solar Massachusetts Renewable Target) program provides declining-block monthly incentive payments for 10 years based on solar production. Current incentive rates vary from $0.03–$0.17/kWh. Combined with the state’s strong electricity prices ($0.28+/kWh), solar payback periods in Massachusetts are among the shortest in the country at 7–9 years without any federal credit.
Maryland
Maryland offers a $1,000 state tax credit for residential solar (small but better than nothing) plus SREC income. Maryland SRECs trade around $50–$80 per MWh, adding $150–$250/year for a typical 5kW system.
New Jersey
New Jersey runs a Successor Solar Incentive (SuSI) program providing 15-year fixed-price SREC 2 certificates at approximately $90/MWh. This adds $450–$900/year for a typical 5–10kW system for 15 years — a meaningful revenue stream even without the federal credit.
Texas
Texas has no statewide solar rebate or tax credit. Austin Energy and CPS Energy (San Antonio) offer utility rebates, but coverage is spotty statewide. Property tax exemptions and sales tax exemptions apply to the equipment. The solar value in Texas comes primarily from high summer electricity rates and net metering (where available — utility policies vary significantly in the deregulated Texas market).
Net Metering in 2026
Net metering remains the most financially significant solar incentive for most homeowners because it applies continuously over the life of the system. Under net metering, your utility credits you for excess electricity your solar panels send to the grid, offsetting what you draw at other times.
The value of net metering depends on:
- Your utility’s compensation rate: Some utilities pay retail rate for excess solar (full-value net metering); others pay a lower wholesale or avoided-cost rate. California’s NEM 3.0 pays roughly $0.05/kWh for exports but charges $0.30+/kWh for imports during evening hours.
- Your electricity rates: High-rate states like California, Massachusetts, New York, and Hawaii benefit most from solar self-consumption.
- Your consumption pattern: Systems that consume most of their generation on-site (daytime users, EV owners who charge during the day) benefit more from net metering than absent households that export most of their generation.
Net metering policies are regulated at the state level. Check your state’s page for current rules. Several states have weakened net metering in recent years; others have strengthened it.
Solar Renewable Energy Credits (SRECs)
In states with renewable portfolio standards, solar system owners can earn Solar Renewable Energy Credits for each megawatt-hour (MWh) of electricity their panels produce. Utilities purchase SRECs to meet their renewable energy obligations.
Active SREC markets as of early 2026:
| State | SREC Program | Approximate Value | Contract Length |
|---|---|---|---|
| Massachusetts | SMART | $30–$170/MWh | 10 years (locked) |
| New Jersey | SuSI (SREC II) | ~$90/MWh | 15 years (locked) |
| Maryland | SREC spot market | $50–$80/MWh | Market price (variable) |
| Washington D.C. | SREC spot market | $350–$450/MWh | Market price (variable) |
| Illinois | Illinois Shines | $65–$80/MWh | 15 years (locked) |
| Pennsylvania | SREC spot market | $20–$40/MWh | Market price (variable) |
A typical 7kW residential system in the Northeast produces roughly 7–9 MWh per year. At Massachusetts SMART rates, that generates $210–$1,530/year depending on the incentive block when you enrolled. In D.C., the same system generates $2,450–$4,050/year in SRECs — genuinely life-changing economics for solar.
D.C.’s high SREC prices reflect the jurisdiction’s aggressive renewable standard (100% by 2032) in a small area with limited land for large solar farms. SRECs here are scarce, which drives prices up.
Utility Solar Rebates
Some utilities still offer upfront rebates for solar installation, though these programs have become less common as solar prices dropped. Where they exist:
- Austin Energy (Texas): $2,500 rebate for residential solar systems, 1kW–20kW
- Sacramento Municipal Utility District (SMUD, California): SolarShares program offers community solar subscriptions as an alternative to rooftop
- Rocky Mountain Power (Utah/Wyoming): Wattsmart rebates for solar, $0.10/W for systems up to 25kW
- National Grid (MA/NY/RI): Various programs that vary by service territory
Utility programs change frequently and are often capacity-limited. Check your specific utility’s website or call their energy efficiency line for current offers.
Should You Still Go Solar in 2026?
The honest answer depends on your state and your situation. The loss of the 25D credit increased the effective cost of a typical solar installation by $6,000–$9,000 compared to 2024. That materially changes the payback period in some markets.
Still makes strong economic sense in 2026:
- Massachusetts — SMART program + high electricity rates + net metering
- New Jersey — SuSI SREC program + high electricity rates
- Washington D.C. — Extremely high SREC prices
- New York — State tax credit + net metering + high electricity rates
- California low-income — DAC-SASH program + high rates (middle- and high-income less compelling post-NEM 3.0)
- Hawaii — Extremely high electricity rates ($0.40+/kWh) make solar math work without federal credit
More marginal in 2026:
- Texas — No state credit, variable net metering, moderate electricity rates. Payback 12–15 years in many areas.
- Florida — High sun but weakened net metering (net metering 1.0 → 2.0 transition). Watch for further policy changes.
- Most Southern states — Low electricity rates reduce solar value; no state credits; paybacks extend to 15+ years.
What to Do Right Now
If you missed the 25D credit window and are evaluating solar for 2026, here is a practical path forward:
- Check your state’s solar incentives using our state rebates index. Do not assume the federal situation applies to your state.
- Get quotes from 3–5 installers and ask each to itemize all incentives — state credits, SREC enrollment, utility rebates, net metering value analysis.
- Run a 25-year NPV analysis, not just payback period. Even a 12-year payback produces substantial net savings over the life of the system if electricity rates continue rising.
- Consider pairing with a heat pump. Solar + heat pump is a powerful combination: the heat pump dramatically increases your electricity consumption (which solar generation offsets at retail rates), improving the economics of both investments. See our heat pump rebates guide for current incentives.
- Check energy efficiency upgrades first. Before solar, consider whether HOMES and HEAR rebates can cut your energy consumption. A smaller solar system on a more efficient home often has better economics than a large system on a drafty one. Use our rebate calculator to see what you qualify for.
For a complete picture of all 2026 energy incentives, see the 2026 energy rebates overview. The solar story is complicated this year, but the broader energy efficiency rebate landscape is better than ever for income-eligible households.