The Federal Solar Tax Credit Ended. Here Is What Is Left
Most solar websites still advertise a 30% federal credit. For a homeowner buying today, it does not exist any more. Here is the accurate position, and the routes that still work.
The federal residential solar tax credit under Section 25D was terminated for expenditures made after 31 December 2025 by the One Big Beautiful Bill Act. Homeowners buying a system today cannot claim it. Section 48E, the commercial and third-party credit, was not repealed, which is why leases and power purchase agreements still carry a federal benefit.
What actually happened
The One Big Beautiful Bill Act, Public Law 119-21, was signed on 4 July 2025. Among many other things it amended Section 25D of the tax code, the Residential Clean Energy Credit, so that it will not be allowed for any expenditures made after December 31, 2025.
Before that Act, the credit was scheduled to run at 30% until 2032 and then step down through 2034. That schedule is gone.
Who can still claim something
| Situation | Position in 2026 |
|---|---|
| Homeowner buying a system now | No federal residential credit available |
| Homeowner who completed installation on or before 31 Dec 2025 | May carry unused credit forward to later tax years |
| Homeowner taking a lease or PPA | No direct claim, but the owner claims 48E and passes value through in the rate |
| Business installing on its own building | Section 48E investment credit, subject to deadlines |
| Tax exempt organisation | Generally reached through third party ownership |
Section 48E, and why leases suddenly matter more
Section 48E, the clean electricity investment credit, was not repealed. The distinction is who claims it: 48E is claimed by the owner of the system, not the occupant of the building.
That is precisely why third party ownership has become the main route for homeowners. Under a lease or a power purchase agreement, an installer or finance partner owns the panels on your roof. They claim what they are entitled to, and that value is built into the rate you pay for the power or the lease. You reach the federal benefit indirectly rather than on your own tax return.
This is a genuine trade rather than a free lunch. You do not own the system, the agreement runs for a long term, and transfer terms on sale matter. But for many households it now produces a better outcome than a cash purchase with no credit.
The 48E deadlines are real
| Construction begins | Must be placed in service by |
|---|---|
| Before 4 July 2026 | 31 December 2029 |
| On or after 4 July 2026 | 31 December 2027 |
We are past 4 July 2026, so any project starting now falls into the second row and has to be commissioned by the end of 2027. Commercial projects routinely take six to twelve months from signature, so that window is tighter than it sounds. This is a checkable statutory deadline, not a sales tactic.
What to do instead
Check the New York incentives properly
The state credit at 25% capped at $5,000, NY-Sun rebates, and the sales and property tax exemptions were all untouched. In New York these now carry the economics.
Price a lease or PPA alongside a cash purchase
This is the only route by which a homeowner still touches a federal incentive. Get both quoted and compare them properly rather than assuming ownership wins.
Re-run the payback with honest numbers
Any calculation you did before 2026 that assumed 30% federal is wrong. Redo it. In high rate territory like Con Edison the answer is often still good.
Questions people ask about this
For residential systems installed after 31 December 2025, yes. Section 25D was terminated by the One Big Beautiful Bill Act signed on 4 July 2025. The commercial and third-party credit under Section 48E was not repealed and still operates.
No. IRS guidance treats the expenditure as made when installation is completed, not when payment was made. This has caught out a number of people. Speak to a tax adviser about your specific circumstances.
Carryforward from a qualifying installation completed on or before 31 December 2025 remains available in later tax years. The termination applies to new expenditures, not retrospectively to credits already earned.
The system owner claims the Section 48E credit and reflects that value in the rate they charge you. You benefit through a lower cost of power rather than through your own tax return. Ask for the rate and escalator in writing and compare against buying.
Yes, and it was not affected. 25% of installed cost capped at $5,000, calculated after the NYSERDA incentive, non-refundable with a five year carryforward.
Tax law changes and this one changed quickly. We date this page and re-verify it rather than guessing at future legislation. Check the date at the top and confirm current rules with a tax professional before making a decision.
How to check any solar contractor
This is a new site with no customer reviews, so we are not going to show you any. What we can do is tell you exactly what to verify about whoever contacts you, and where to look it up. That applies to the installer we refer you to and to every other quote you get.
NABCEP certification
The North American Board of Certified Energy Practitioners is the industry standard credential for solar installers. It certifies the individual professional who holds it, not the company, so a firm advertising it may have one certified person and twenty who are not.
How to check. Ask which named individual holds it, then search that name in the directory.
Search the NABCEP directoryNYSERDA participation
Registration in the state's NY-Sun programme. This one is not a nice to have: the New York State incentive is only available through an approved contractor, so using an unregistered installer forfeits it. Some also hold the Quality Solar Installer designation, which requires at least 12 NY-Sun projects in the past year and an average of 4 out of 5 on NYSERDA's own field inspections.
How to check. Search the company name in NYSERDA's list before you sign anything.
Check NYSERDA's contractor listLicensing and insurance
Appropriate electrical licensing for the work, plus general liability and workers compensation cover. A contractor without workers compensation can leave you personally exposed if someone is injured on your roof.
How to check. Ask for certificates of insurance naming you, and check the licence with your town or county before work starts. Do not accept a policy number alone.
Local experience
Interconnection is where most New York solar timelines slip, and it is handled very differently by Con Edison, National Grid, NYSEG, RG&E and PSEG Long Island. Permitting varies again by town.
How to check. Ask how many systems they have energised on your specific utility in the past year, and for two addresses in your county you can drive past.
NY Solar Finder is operated by RBR Growth Consulting. We are not a solar installer, we hold no industry certification, and we do not guarantee the credentials of the company that contacts you. We name these standards, and link to the bodies that issue them, so that you can check that company yourself before you sign anything.
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