The short answer
No federal tax credit is available to a homeowner buying solar outright in 2026. Section 25D ended for systems whose installation completed after 31 December 2025. A 30% credit still applies to leases and power purchase agreements under Section 48E, but the finance company claims it, not the homeowner, and passes it on as a lower payment.
- 01Cash and loan purchases: no federal credit, on any system finished after 31 December 2025.
- 02Leases and PPAs: 30% still applies, claimed by the system owner and priced into the monthly figure.
- 03The test is when installation finished, not when the contract was signed.
- 04State and utility programmes were untouched by the federal change and are now the only incentive many homeowners can claim directly.
This is the question your phone is now ringing with, and the honest answer takes about thirty seconds to give. Give it badly and you lose the call. Give it well and you have separated yourself from every competitor still hedging.
What is the short answer?
A homeowner buying a system outright, with cash or with a loan, gets nothing from the federal government in 2026. Section 25D, the Residential Clean Energy Credit, was repealed by the One Big Beautiful Bill Act and does not apply to expenditures made after 31 December 2025. The Congressional Research Service sets out the expiration and the carryforward position in its summary of the change.
A homeowner going onto a lease or a power purchase agreement is in a different position, because they are not the owner. The finance company that owns the equipment claims the Section 48E investment credit, and competitive pressure means most of that value shows up in the monthly number the homeowner is quoted.
When exactly does a system count as finished?
This is the detail that catches people, and it is worth being precise about because it decides real money. The IRS treats an expenditure as made when the original installation of the item is completed. Not the deposit, not the signature, not the permit. If installation finished on 4 January 2026, the credit does not apply, however long ago the contract was signed.
What is still available?
| How the homeowner buys | Federal credit | Who claims it |
|---|---|---|
| Cash | None | Not applicable |
| Loan or finance, homeowner owns | None | Not applicable |
| Lease | 30% under 48E | The finance company that owns the system |
| Power purchase agreement | 30% under 48E | The finance company that owns the system |
Outside the federal picture, nothing changed. State income tax credits, utility rebates, property tax exemptions, sales tax exemptions and net metering rules all sit where they did, and in several states they are now the only incentive a homeowner can claim in their own name. See state solar incentives that still matter.
How long does 48E last?
Not indefinitely, and the timing is already narrower than most sales teams realise. Projects that began construction before 4 July 2026 have until the end of 2030 to be placed in service. Anything that began construction after that date must be placed in service by 31 December 2027. The five per cent cost safe harbor was largely removed, leaving the physical work test as the practical way to establish a construction start.
For a homeowner conversation this reduces to one sentence: the arrangement that still carries the credit has an end date, and it is closer than people think. That is a legitimate reason to move this year, which is more than can be said for most urgency in this industry. The mechanics are in Section 48E explained for solar installers.
How should you answer it on the phone?
Short, specific, and without hedging. Hedging reads as either ignorance or evasion, and both cost you the appointment.
- 01
Answer the question that was asked
"The homeowner credit ended at the start of this year. If you buy the system outright there is no federal credit now." Say it first. Do not open with a caveat.
- 02
Then give them the part they do not know
"There is still a thirty per cent credit on the lease and PPA side. The difference is the finance company claims it instead of you, and it comes back as a lower monthly payment rather than a refund."
- 03
Move to their bill
"The number that actually matters for you is what you pay the utility now against what you would pay instead. Can you tell me roughly what your last bill was?" That question is the appointment.
- 04
Point them at their own advisor for anything specific
You are not their accountant and should not sound like one. Confirming their own position with a tax professional is the right advice and it costs you nothing to give.
Whoever gives that answer first tends to win the job, which makes this a speed problem as much as a knowledge one. See speed to lead for solar companies for why the first callback takes most of the market.
What about your website?
Most solar sites are still advertising a credit that no longer exists for the customer reading the page. A banner, a savings calculator with thirty per cent baked into it, or an old post that ranks well and now misinforms. Every one of those is a homeowner arriving at your quote with the wrong number in their head, and an argument waiting at the kitchen table.
Audit it this week. Search your own domain for the phrase, fix the calculator, and update or retire the posts. Solar website mistakes covers the rest of what tends to be wrong on the same pages.
Stop reading, start booking
Volt builds and runs the system this article describes: the site, the follow-up, the inbox and the review funnel, for $297 a month.
No contracts. Cancel anytime.
Common questions
- Did the solar tax credit really end, or was it just reduced?
- It ended. Section 25D was repealed rather than stepped down, and it does not apply to any expenditure made after 31 December 2025. There is no reduced residential rate to fall back on.
- My system was installed in 2025 but I am filing in 2026. Do I still get it?
- The test is when installation completed, not when the return is filed. A system finished in 2025 is a 2025 expenditure and is claimed on the 2025 return in the normal way. Confirm the detail with a tax professional.
- Can a homeowner claim the credit on a lease?
- No, because they do not own the system. The finance company owns it and claims Section 48E. The homeowner sees the benefit indirectly, through the payment they are quoted, which is why lease pricing has held up better than cash pricing this year.
- Are state incentives affected?
- No. The change was federal. State credits, utility rebates, property and sales tax exemptions and net metering arrangements are all set locally and were untouched, though several have their own separate deadlines worth checking.
