Incentives in 2026
The solar tax credit in 2026: what ended and what didn't
A lot of solar ads are still selling a credit that no longer exists for homeowners. This is the law itself: which credits ended, which survived, and the property-tax deadline coming on January 1, 2027.
Checked . Sources linked in the text.
By the Golden Hour Energy editorial team. How we research and check our guides
If you buy solar in 2026, there is no federal tax credit for you. The homeowner credit ended for systems placed in service after December 31, 2025. What didn't end is the business credit, Section 48E, which companies that own leased and PPA systems can still claim, generally through the end of 2027 (SEIA). In California, one more deadline is coming: the property-tax exclusion for new solar stops applying on January 1, 2027 (Board of Equalization).
This page covers the law itself. If you're deciding how to pay for a system, the lease vs buy guide covers that decision.
- Dec 31, 2025EndedHomeowner credit (25D) endsSystems placed in service after this date don't qualify. Signing earlier doesn't help if the system went live later.
- Jul 4, 2026Deadline48E construction-start date passesLease and PPA projects that began construction by this date can generally keep 48E eligibility.
- Jan 1, 2027DeadlineCalifornia solar property-tax exclusion sunsetsThe exclusion stops applying to new systems. Systems that qualified before then stay excluded until the property changes hands.
- End of 2027Still open48E placed-in-service deadline for leases and PPAsThird-party-owned systems placed in service by then can generally qualify, subject to equipment-sourcing rules.
What ended: the homeowner credit (Section 25D)
Section 25D, the Residential Clean Energy Credit, let homeowners who bought solar or batteries subtract a large share of the cost from their federal taxes. The 2025 federal budget law ended it early. Systems placed in service after December 31, 2025 no longer qualify (SEIA, pv magazine USA).
The key phrase is “placed in service.” It means the system is installed and ready to run, not the day you signed or paid a deposit. If you signed in late 2025 and your system was switched on in 2026, the credit doesn't apply. If you're unsure about your own case, ask a tax professional, not the salesperson.
This also covers batteries bought on their own or with solar. There's no longer a federal homeowner credit for either.
What didn't end: the business credit for leases and PPAs (Section 48E)
Section 48E is a credit for businesses that own clean energy systems. When you lease solar or sign a PPA, a company owns the equipment on your roof, and that company may claim 48E. Under the new law, it's generally available for systems placed in service by the end of 2027, or for projects that began construction by July 4, 2026, and it comes with limits on equipment from certain foreign entities (pv magazine USA).
You don't claim this credit yourself. What you might see is a lower lease or PPA price, if the provider passes some of the value on. Not every provider does, so ask.
California's property-tax exclusion and the 2027 deadline
In California, adding a qualifying solar system hasn't triggered a property-tax reassessment, so the panels don't raise your assessed value. SB 1340 (2022) extended that exclusion to January 1, 2027 (SB 1340). In 2025, SB 710 changed the wording so the exclusion becomes inoperative on that date rather than repealed. The Board of Equalization's September 2026 letter to assessors says systems already excluded “will remain excluded from property tax until the property changes ownership” ( BOE).
A 2026 bill to extend the exclusion, AB 2389, was held in the Assembly Appropriations Committee on May 14, 2026 and didn't advance (bill history). So, unless the Legislature acts, a system has to qualify before January 1, 2027 to be excluded. Your county assessor's office can tell you how that applies to your project's timing.
State incentives that still exist
- SGIP battery rebate. Most residential categories are closed or waitlisted right now. Current status is in our battery guide.
- Low-income programs. The CPUC notes exceptions for income-qualified homeowners, including the DAC-SASH program in disadvantaged communities. See cpuc.ca.gov/solarguide/lowincomesolar.
| Topic | If you buy | If you lease or PPA |
|---|---|---|
| Federal 25D | Ended after 2025 | Not applicable |
| Federal 48E | Not available to homeowners | Provider may claim it, through about 2027 |
| CA property-tax exclusion | Must qualify before Jan 1, 2027 | Ask the provider, since they own the system |
| SGIP | Mostly closed or waitlisted | Depends on the provider's program |
Two pitches that break these rules
Anyone who promises a federal credit on a cash or loan purchase in 2026 is wrong. So is anyone who suggests forming an LLC to claim business credits on your home, which the CPUC lists as a false claim. Both are on our page of claims to walk away from.