Promised a Solar Tax Credit? What Changed in 2026
For years, solar sales pitches leaned on a 30% federal tax credit. A 2025 federal law ended that credit for homeowner-owned systems installed after 2025. If you were promised a tax credit, here's what to check.
What changed
The federal Residential Clean Energy Credit (Section 25D) let homeowners who bought a system, with cash or a loan, claim 30% of the cost on their taxes. Under the budget law signed in July 2025, the credit ended for systems installed after December 31, 2025. A separate credit that solar companies claim on leased and PPA systems continues for a limited time, but that credit goes to the company, not to you.
If your system was installed in 2026 or later
If a salesperson told you in 2026 that you'd get a 30% federal tax credit on a system you own, that information was wrong. If the credit was part of how the deal was sold to you, for example to make a loan look affordable, keep any proposal, text or email that mentioned it.
If your system was installed in 2025 or earlier
You may have qualified, but only if you owned the system and owed enough federal income tax to use the credit (unused amounts could generally carry forward). Many homeowners on fixed incomes owed little tax and couldn't use much of it. A tax professional can confirm.
Why it matters for solar loans
Many solar loans were designed around the credit. The payment is set low at first, assuming you'll pay down a lump sum (often around 30% of the loan) by a deadline, usually 12 to 18 months in. If you don't, the payment can jump. Check your loan documents for a “voluntary prepayment” or re-amortization clause and the date.
Leases and PPAs
With a lease or PPA, the company owns the system and takes the tax benefits. If you were told you'd personally get a tax credit on a leased system, that's a red flag. See lease vs. loan vs. PPA.
What to do
- Confirm your install date and whether you own or lease the system.
- Ask a tax professional whether you actually qualified and how much you could use.
- Find any paydown deadline in your loan.
- If the credit was misrepresented, get a free review of your options.
Tax rules are complex and change. This is general information, not tax advice.
Related guides
- Selling a house with solar
- If your solar company closed
- How to file a complaint
- How to cancel a solar contract
- All guides
This guide is general information, not legal advice. Laws change and vary by state. Talk to a licensed attorney in your state about your situation.