Solar Incentives in 2026: What's Still Available After the Federal Credit Ended

Q: Is there still a federal solar tax credit in 2026?

Not for homeowners who buy their system. The 30% Section 25D residential credit expired December 31, 2025. The only remaining federal benefit reaches homeowners indirectly through solar leases and PPAs, where the installer claims the commercial 48E credit (available through 2027).

Q: What solar incentives can I actually get in 2026?

It depends on your state, but the main ones are state income tax credits (in 7 states), SRECs (in 8 states/D.C.), utility and storage rebates, property tax exemptions, sales tax exemptions, and net metering.

Q: Which states have the best solar incentives in 2026?

States with strong combined packages include New Jersey, New York, Massachusetts, Maryland, Illinois, and South Carolina — thanks to SRECs, state tax credits, and full-retail net metering.

Q: Does net metering still exist in 2026?

Yes, but it varies. Many states keep full-retail net metering, while California, Arizona, and Utah now use lower net-billing export rates. In reduced-rate states, batteries help preserve savings.

The biggest change for 2026 is simple: the 30% federal residential solar tax credit (Section 25D) expired on December 31, 2025 under the One Big Beautiful Bill Act. There is no phase-down and no partial version in 2026 — homeowners who buy a system outright this year cannot claim it.

But "no federal credit" does not mean "no incentives." Most savings now come from your state, your utility, and how you finance the system. In several states, the combined value of rebates, tax credits, net metering, and exemptions still covers a meaningful share of the cost.

Want your specific numbers? Incentives vary by state, utility, and roof. Get a free, no-obligation solar quote →

The Federal Picture in 2026 — What Changed

The 25D residential credit is gone

The Section 25D credit, which gave homeowners 30% back on a purchased system, ended for any system placed in service after December 31, 2025. If you paid cash or took a solar loan in 2026, this credit is not available to you. (If you installed in 2025, the credit still applies to that tax year, and any unused amount carries forward.)

One federal path still exists — through leases and PPAs

The commercial clean-energy credit (Section 48E) remains in effect through the end of 2027. Homeowners can't claim it directly, but the company that owns the panels can — through a lease, PPA, or prepaid third-party-ownership plan. Lease/PPA projects generally must begin construction by July 4, 2026 to qualify for the full four-year completion window; later projects must be placed in service by December 31, 2027.

State Solar Incentives — Where the Real 2026 Savings Are

State income tax credits

Seven states still offer a residential solar income tax credit in 2026: Arizona, Hawaii, Massachusetts, New Mexico, New York, South Carolina, and Utah. Examples: New York — 25% capped at $5,000; South Carolina — 25% with no annual cap (up to $35,000 total) plus a 10-year carryforward; Arizona — 25% capped at $1,000.

SRECs (Solar Renewable Energy Credits)

In some states you earn a tradable credit for the power your system produces — one SREC per 1,000 kWh — which you sell to utilities meeting clean-energy targets. SREC markets exist in Delaware, Washington D.C., Illinois, Maryland, Massachusetts, New Jersey, Ohio, and Pennsylvania. In strong markets (e.g., NJ's SuSI, Illinois' SREC program) these can total around $10,000+ over 15 years.

Rebates and storage programs

Many states and utilities offer upfront rebates, and several have added battery storage incentives as net-metering rules tighten — for example, New Jersey's Garden State Energy Storage Program. Income-qualified rebates can add several thousand dollars more.

Property and sales tax exemptions

Two of the most overlooked incentives: a property tax exemption (your tax bill doesn't rise for the added home value) and a sales tax exemption on solar equipment, which cuts the purchase price directly.

Net Metering — How You're Paid for Extra Power

Net metering credits you for excess electricity sent to the grid, and it's one of the biggest factors in long-term savings. The rules vary sharply in 2026:

Full retail net metering (best value): New Jersey, Massachusetts, New York, Maryland, Connecticut and most of New England, plus retail-rate programs in Pennsylvania, Ohio, and Florida.
Net billing / reduced export rates: California, Arizona, and Utah. Under California's NEM 3.0, exports are now worth roughly 5–8 cents/kWh — down about 75% from the old retail rate.

Where export rates dropped, adding a battery is now the standard way to protect savings. See Is a Solar Battery Worth It in 2026?

How to Find the Incentives for Your Address

Note your state and utility company.
Decide whether you're considering cash/loan (state + local incentives) or lease/PPA (where the 48E benefit can flow through).
Request a free quote for a custom breakdown of every incentive you qualify for.

Frequently Asked Questions

Is there still a federal solar tax credit in 2026?
Not for homeowners who buy. The 30% Section 25D credit expired December 31, 2025. The only remaining federal benefit reaches homeowners through leases and PPAs (48E, through 2027). See our 2026 tax credit guide.

What solar incentives can I actually get in 2026?
State income tax credits (7 states), SRECs (8 states/D.C.), utility and storage rebates, property and sales tax exemptions, and net metering.

Which states have the best solar incentives in 2026?
New Jersey, New York, Massachusetts, Maryland, Illinois, and South Carolina rank highly.

Does net metering still exist in 2026?
Yes, but it varies — full retail in many states, lower net-billing rates in CA, AZ, and UT.

Is solar still worth it without the federal tax credit?
For many homeowners, yes. See our cost guide and worth-it breakdown.

Solar Energy Nerds provides general information, not tax or financial advice. Incentives and costs vary by state, utility, and household — verify current figures for your address before making a decision.