Federal Solar Tax Credit Expired: What Homeowners Need to Know in 2026
The 30% federal solar tax credit (25D) expired December 31, 2025. Here's what changed, what's still available, and whether solar still makes sense.
On July 4, 2025, the One Big Beautiful Bill terminated the 30% federal solar tax credit (Section 25D) effective December 31, 2025. No phase-down — it ended abruptly.
⚠️ What expired vs. what's still active
❌ 25D (solar, battery storage) — expired Dec 31, 2025 ❌ 25C (heat pumps, insulation) — expired Dec 31, 2025 ❌ EV credit (30D) — expired Sep 30, 2025 ✅ HEEHRA/HOMES state rebates — still active (income-based, varies by state) ✅ Solar lease/PPA (48E) — still active through end of 2027
Two Key Exceptions
Installed in 2025? You can still claim the credit on your 2025 tax return (Form 5695). Unused credit carries forward to future years.
Leased solar or PPA? The installer claims the 48E credit — not you — but savings may be passed through as lower monthly payments. This pathway stays open through 2027.
Does Solar Still Make Sense?
Yes, for most homeowners — the math just changed.
| Pre-2026 (with credit) | 2026 (no credit) | |
|---|---|---|
| Net cost (10kW system) | $21,000 | $30,000 |
| Annual savings† | $1,800 | $1,800 |
| Simple payback | ~11.7 years | ~16.7 years |
†U.S. average rate $0.15/kWh, 10,000 kWh/year. Varies significantly by state.
The payback period is longer, but solar still delivers positive returns over a 25-year lifespan in most markets — especially in high-rate states like California, New York, and Hawaii.
State credits, net metering, utility rebates, and property tax exemptions remain in place and can meaningfully offset the loss of the federal credit.
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Use Calculator →Sources: IRS.gov OBBB FAQ, SEIA. Not tax advice — consult a tax professional for your situation.
About the Author
CleanEnergyCalc Editorial Team
Energy Policy Analysts
We track federal and state clean energy incentives using IRS, DOE, and NREL data.