Solar Tax Credit in 2026: What U.S. Homeowners Need to Know

Solar tax-credit rules changed significantly for U.S. homeowners in 2026. Homeowners with solar systems completed in 2025 may still be able to claim the federal credit, while people installing new systems in 2026 face different rules.

This guide explains how the solar tax credit applies in 2026, including which 2025 installations can still qualify, what expenses were eligible, how to claim the credit, and what other solar incentives may still be available.

Is the Federal Solar Tax Credit Still Available in 2026?

No. The federal Residential Clean Energy Credit is no longer available for new home solar systems completed in 2026. To qualify, the solar installation had to be completed by December 31, 2025. Paying a deposit in 2025 was not enough if the installation was finished in 2026, because the IRS uses the completion date.

For home solar systems finished in 2025, the federal tax credit covered 30% of eligible costs. It lowered the amount of federal income tax you had to pay. If the credit was more than the tax you owed, you would not get the extra amount back as cash.

Can You Claim the Solar Tax Credit in 2026 for a 2025 Installation?

Yes. If your qualifying home solar system was completed in 2025, you can still claim the credit when filing your 2025 federal tax return in 2026. The key questions are whether the system met the 2025 deadline, how the credit is reported, and what happens if you cannot use the full amount at once.

The System Must Have Been Placed in Service by the 2025 Deadline
The system had to be placed in service by December 31, 2025. This is the eligibility checkpoint for claiming the former Residential Clean Energy Credit on a 2025 return.

A Qualifying 2025 Installation Can Be Claimed on the 2025 Tax Return
A qualifying system completed in 2025 is claimed on the homeowner’s 2025 federal tax return, which is generally filed in 2026. The credit is calculated from eligible 2025 costs and reported using Form 5695.

Unused Credit May Be Carried Forward Under IRS Rules
If the allowable credit is larger than the amount of federal income tax you can offset for 2025, the unused eligible portion may be carried forward under IRS rules for use in a later tax year.

Who Qualified for the Residential Solar Tax Credit?

To qualify for the residential solar tax credit, the home, solar property, installation timing, ownership, and taxpayer's use of the residence had to meet the applicable requirements. Because the credit was nonrefundable, federal income tax liability affected how much of an otherwise eligible credit could be used for 2025, while any unused eligible amount could be carried forward under IRS rules.

Homeowners With a Qualifying U.S. Residence

The solar system had to be installed on a home in the United States that the taxpayer used as a residence. This could include a main home and, in some cases, a second home. A landlord generally could not claim the credit for a property used only by tenants.

Owners of Purchased or Financed Systems

Homeowners who bought their solar system with cash or a loan could usually claim the credit if they met the other requirements. However, loan interest, loan fees, and similar financing costs did not count. If the system was leased or used through a power purchase agreement, the company that owned the system usually received the tax benefit instead of the homeowner.

Taxpayers With Federal Tax Liability to Apply the Credit Against

The Residential Clean Energy Credit was nonrefundable, so it could reduce federal income tax owed but could not create a cash refund beyond the taxpayer’s available tax liability. How much of the credit could be used for 2025 therefore depended on the homeowner’s federal tax situation.

Which Solar Expenses Qualified for the Credit?

The Residential Clean Energy Credit was a tax credit rather than a tax deduction. Eligible expenses were used to calculate the credit; they were not simply deducted from taxable income.

The 30% federal tax credit only covered certain solar costs. Some other costs, such as regular roofing work, did not qualify. The expenses below were among the costs that could qualify for the credit.

Solar Panels and Electricity-Generating Equipment

Solar panels and related equipment used to generate electricity for a U.S. home were among the expenses that could qualify for the federal tax credit. However, not every solar product qualified. Homeowners comparing solar panels should check whether the equipment meets the tax-credit rules before claiming the cost.

Installation Labor, Wiring, and Related Components

Some installation costs could also qualify for the tax credit. These include labor to prepare the site, install the solar system, and connect it to the home with wiring or piping. Other costs, such as general home remodeling, unrelated electrical work, loan fees, and extended warranties, were not eligible even if they appeared on the same bill as the solar installation.

Eligible Battery Storage

Battery systems with at least 3 kWh of storage capacity could qualify for the 2025 Residential Clean Energy Credit. The battery could be installed together with solar panels or as a separate project. A home battery backup is one type of battery system that stores electricity for later use, such as during power outages or when solar panels are not producing electricity.

Qualifying Solar Roofing Components

Regular roofing materials, such as shingles, roof decking, and support structures, usually did not qualify for the tax credit just because solar was installed. However, solar roof tiles or shingles that also generate electricity could qualify. IRS qualified-expenditure guidance explains the difference between solar roofing that produces electricity and normal roofing materials.

Portable solar products should not automatically be treated the same as a qualifying residential solar installation. Products such as solar generators or the BLUETTI 500W portable solar panel may serve backup, camping, or portable-power needs, but homeowners should determine separately whether a specific purchase meets the applicable federal, state, or utility incentive requirements before including it in an incentive calculation.

How Do You Claim a Qualifying 2025 Solar Installation?

To claim the credit for a qualifying solar system completed in 2025, you need to confirm the installation date, collect your records, calculate the credit, and keep supporting documents.

1. Confirm the Placed-in-Service Date

Make sure the original installation was completed by December 31, 2025. Keep records that show when the system was finished, such as installer documents or utility approval when required.

2. Gather Contracts, Invoices, and Payment Records

Collect your contract, invoices, receipts, proof of payment, equipment details, and battery records. Separate the costs that qualified for the credit from costs that did not, such as roof repairs, loan interest, loan fees, warranties, and unrelated electrical work.

3. Calculate the Credit on IRS Form 5695

Use Part I of Form 5695 to calculate the Residential Clean Energy Credit for your qualifying 2025 expenses. Enter the eligible costs in the correct sections, follow the form instructions, and transfer the allowed credit to your 2025 tax return. The IRS also provides a step-by-step claim guide.

4. Keep Supporting Records

You usually do not need to send every invoice with your tax return, but you should keep your records. Keep the 2025 Form 5695 and return records showing any unused credit carried forward for use in a later tax year.

What Solar Incentives May Still Be Available in 2026?

Even though the federal residential solar tax credit ended, some other solar incentives may still be available in 2026. These programs depend on where you live, so check current state, local, and utility rules before planning your budget.

State Tax Credits and Rebates

Some states may still offer solar tax credits, rebates, tax exemptions, grants, or battery incentives. The amount and rules vary by program. The DSIRE database can help you search for renewable-energy incentives available in your state.

Local and Utility Rebates

Utilities and local governments may offer rebates for rooftop solar, battery storage, or related energy upgrades. These programs can reduce eligible upfront costs, but some require an application or approval before equipment is purchased or installation begins.

Performance-Based and Other Local Solar Programs

Local solar programs may offer bill credits, net-metering benefits, renewable energy certificates, or other payments based on how much electricity a solar system produces. These programs are different from the former federal tax credit. Payment rates, system limits, connection rules, and application periods vary by location, so check the latest information from your utility or state program.

Conclusion

In 2026, the federal solar tax credit mainly applies to qualifying systems completed by December 31, 2025. Homeowners claiming the credit should confirm the installation date, include only eligible costs, complete Form 5695, and keep records of the installation and any unused credit carried forward.

For new solar projects in 2026, the focus shifts to state, local, and utility incentives, which can vary significantly by location and may have their own eligibility rules, deadlines, or pre-approval requirements. Before budgeting a project, check the programs available where you live and confirm which equipment and installation costs they actually cover.