Understanding your federal credit in 2026
Why most homeowners now get nothing federally
The One Big Beautiful Bill Act, signed July 4, 2025, struck the old expiration date in Section 25D and replaced it with a flat cutoff. The IRS page on the residential clean energy credit states the current rules and the placed-in-service cutoff. Any system placed in service after December 31, 2025 gets no residential credit at all, with no phase-down and no partial year. A system that would have earned thousands of dollars in December 2025 earns zero if it's finished in January 2026 instead.
Placed-in-service date, not contract date, decides everything
Section 25D treats an expenditure as made when the system is actually installed and turned on, not when you signed paperwork or made a deposit. A homeowner who paid a deposit in November 2025 but whose installer pushed the activation date to February 2026 due to permitting delays gets nothing, even though most of the money left their account the year before. If your install date is uncertain, ask your installer directly and build in a buffer.
What lease and PPA customers still get
If a company owns the panels on your roof under a lease or PPA, that company can still claim a 30% credit under Section 48E through the end of 2027. Some installers pass part of that value to you as a lower monthly rate, but the credit itself never appears on your tax return. Ask your installer directly whether their pricing already reflects this credit, since not all of them are transparent about it. Compare this path against ownership using the rebate plus ITC combined calculator. For the exact rules on what counts, the IRS instructions for Form 5695 are the source to read.
The business-owned exception
Commercial and rental-property solar still runs on Section 48E on its own separate clock. Projects that began construction before July 4, 2026 generally keep a longer runway, with placed-in-service deadlines extending toward the end of 2030. Projects starting construction later face a faster wind-down. If you own a rental property or small business considering solar, the commercial and small business hub covers depreciation and demand-charge tools built specifically for that case.
What to check next
A $0 federal number is often not the end of the story. Most state programs, utility rebates, and SREC markets run independently of federal law and were not touched by the One Big Beautiful Bill Act. Run your state's tax credit and rebate estimator next, then use the rebate stacking tool to check whether your state and utility programs can be combined.
Your rebate total changes what a loan costs each month, and the combined loan and rebate timing tool shows that payment once you enter both figures. If you may qualify for low-income solar programs beyond what's covered here, the community solar for low-income households tool is worth checking too.