Can You Still Get the 30% Solar Tax Credit in 2026?

The short answer, as of July 2026

If you buy a solar system in 2026 — with cash or a loan — no. The 30% federal credit homeowners used to claim on their own tax returns, the Residential Clean Energy Credit (Section 25D), ended for systems whose installation was completed after December 31, 2025. Congress terminated it in the One, Big, Beautiful Bill, signed July 4, 2025, and the IRS has confirmed the cutoff in plain language.

A homeowner who purchases a system installed in 2026 generally gets $0 from that credit. Any company still telling 2026 buyers to "claim 30% on your taxes" is quoting a credit that no longer applies.

But that's not the whole story. The 30% federal credit hasn't disappeared from solar — it moved. The commercial version of the credit (Section 48E) is still alive, and it's the reason solar leases, power purchase agreements (PPAs), and prepaid plans still carry federal tax-credit value in 2026. Under those arrangements, the financing company owns the system on your roof and claims the credit — and competitive installers can price that value into a lower payment for you.

The rest of this guide explains exactly how that works, what it doesn't mean, and how long it lasts. As with anything tax-related, confirm your specific situation with a licensed tax advisor before you count on any of it.

Why your contract date didn't matter — only the install date did

Section 25D had an unusual trigger, and it's worth understanding because it's still catching people out this filing season. For most federal energy credits, the key date is when a system is "placed in service." Section 25D instead turned on when the expenditure was treated as made — and the statute deemed that to happen when the original installation was completed. Not when you signed a contract. Not when you paid a deposit. Not when you made your final payment.

The IRS spelled this out in its FAQ on the new law: if installation is completed after December 31, 2025, the expenditure is treated as made after December 31, 2025 — which prevents the taxpayer from claiming the Section 25D credit. In practice, the real homeowner deadline was a system fully installed by New Year's Eve 2025. A deposit paid in 2025 on a system installed in 2026 did not preserve the credit.

One nuance for homeowners who did make the deadline: if your installation was completed by December 31, 2025 and the credit was bigger than your tax bill that year, unused credit from that qualifying installation may still be carried forward. That's a question worth putting to your tax preparer — not something to guess at.

Where the 30% still lives: the commercial credit (Section 48E)

The credit that survived is Section 48E, the Clean Electricity Investment Credit — the version a business claims when it owns a clean-energy system. It starts at a 6% base and can reach about 30% for projects that meet federal prevailing-wage and apprenticeship standards; residential-scale systems under 1 megawatt (measured in alternating current) are exempt from those requirements and qualify for the full rate automatically, which is why "up to about 30%" is a realistic figure for home solar owned by a company.

Here's how that applies to your roof. With a lease, PPA, or prepaid plan, a third-party company — not you — owns the system. Because the owner is a business, the system qualifies under the commercial credit even though it's sitting on a residential roof. The financing company is the taxpayer that claims Section 48E. You are the customer: you file nothing, you receive no tax form for the credit, and you don't need any tax liability for the arrangement to work.

How the benefit reaches you — and the honest limits

So why does any of this matter to a homeowner? Pricing. Competitive installers factor the tax-credit value the system's owner expects to claim into the lease or PPA rate they offer you. That's the mechanism by which federal solar value can still reach a household in 2026 — as a lower monthly payment, not as a line on your tax return. Our financing page compares $0-down lease and PPA structures against cash and loan options side by side.

Now the honest limits, because this is where sloppy marketing creeps in. The pass-through is not required by law. It is not guaranteed, it is not a fixed 30%, and in practice it is often partial. How much of the credit's value reaches you depends entirely on the provider and the contract. If a salesperson tells you that you "get the 30% tax credit" on a lease, that's wrong on its face — the owner claims the credit; you benefit from it only to the extent it's priced into your payment.

Compare multiple offers, read the escalator and buyout terms, and if a quote's tax-credit claims smell off, we'll review it free through our second-opinion service.

Buying vs. leasing in 2026: who claims what

Here's the whole 2026 landscape in one table — what changed, who claims what, and what actually reaches the homeowner under each path.

So which path wins? Buying still makes sense for homeowners who want to own the asset outright and keep every kilowatt-hour of value it produces — the purchase math now runs entirely on energy economics rather than a federal credit, so an honest, itemized quote matters more than ever (see what solar actually costs in California in 2026). A lease, PPA, or prepaid plan is the only remaining route to federal tax-credit value, typically with $0 down — at the cost of not owning the system.

The right answer depends on your cash position, your goals, and the real numbers side by side, which is exactly how we quote it.

What actually drives your savings in California

The federal credit was never the whole story in California — and for a 2026 buyer it's now no part of the story. What determines whether solar pays off here: your utility's rates and how fast they rise, California's net-billing rules (NEM 3.0), which reward pairing solar with a battery, any state and local incentives you qualify for, and — on third-party contracts — the specific terms you sign. We keep a current rundown in our California solar incentives guide.

Two more inputs people overlook. First, the battery: under NEM 3.0, the savings come largely from storing your own daytime power and using it during expensive evening hours, so battery pricing belongs in your math from day one — see our Tesla Powerwall cost guide. Second, the roof under the panels: putting solar on a roof near the end of its life sets up an expensive detach-and-reset later.

If your roof is borderline, read whether to handle the roof before solar — we run our own roofing crews, and if you're reroofing anyway, an integrated option like the Tesla Solar Roof may deserve a look (we install both).

The clock on the commercial credit

The lease and PPA path isn't permanent either. For solar, Section 48E generally requires a project to begin construction by July 4, 2026, or to be placed in service by the end of 2027, to qualify — though projects that start construction in time can be completed later under safe-harbor rules. Those deadlines, and the compliance details behind them, sit with the companies that own and finance the systems; homeowners don't manage them.

What the deadlines mean for you is simpler: the window in which lease and PPA pricing can include federal tax-credit value is finite and narrowing. Pricing offered in 2026 reflects credit value the financier expects to claim; as the program phases down, that ingredient goes away. If a third-party-owned system is part of your plan, it's worth getting real quotes sooner rather than later — not because of sales pressure, but because the law has a calendar.

Bottom line — and the next step

As of July 2026, three things are true. If you buy a system, you cannot claim the 30% residential credit — Section 25D ended for installations completed after December 31, 2025. If you go with a lease, PPA, or prepaid plan, the financing company that owns the system claims the commercial Section 48E credit, and you can benefit from that value when it's priced into your payment — a benefit that is real but not guaranteed, not fixed, and often partial.

And the commercial path itself phases down, with construction generally required to start by July 4, 2026, or the system placed in service by the end of 2027.

The practical next step hasn't changed: get real numbers for your home and compare the paths side by side. OC Solar has handled 6,373 projects & service calls since 2016, holds a 4.9★ Google rating (400+ reviews), and is licensed under CSLB #1023627 — Tesla Powerwall Premier Certified, a Tesla Solar Roof installer, and an Owens Corning Roofing Preferred Contractor, with a 30-day median sign-to-install. Get a free estimate and we'll model buy vs. lease honestly, or bring us a competitor's quote and we'll tell you whether its tax-credit claims hold up.

Disclaimer: This information is provided for general educational purposes only and is not tax, legal, or financial advice. Federal solar tax credit rules changed under the 2025 budget law and continue to evolve, and your eligibility and benefit depend on your specific situation, the type of system, and your tax liability. The federal Residential Clean Energy Credit (Section 25D) ended for systems whose installation was completed after December 31, 2025; for leases and PPAs, the commercial credit (Section 48E) is claimed by the system's owner, not by the homeowner, and any benefit you receive is reflected indirectly in your pricing and is not guaranteed, fixed, or required by law.

The commercial credit is also scheduled to phase down. Always confirm your eligibility and the actual financial impact with a licensed tax advisor or CPA before making a decision.