Savings and payback
See your net cost and payback with a federal tax credit applied, reflecting that the 30% residential credit no longer applies to systems bought in 2026 or later.
Current status: the 30% federal residential solar tax credit (Section 25D) expired for systems placed in service after December 31, 2025. If you're buying with cash or a loan in 2026 or later, the accurate default below is 0%. This tool still lets you model the historical 30% rate for comparison, or if your system was installed by the end of 2025. For planning purposes only, not financial or tax advice; confirm figures with a licensed installer or tax professional before making a purchase decision.
How it works
Step 1
Use the gross quote amount before any credit is applied.
Step 2
0% reflects current 2026 law for a new owned purchase. Only choose 30% if your system was placed in service by the end of 2025. See the savings without ITC applied tool for the reverse comparison, or the payback period calculator for the fuller math.
The 30% federal residential solar tax credit, Section 25D, expired for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act. Homeowners who buy their own system with cash or a loan in 2026 or later receive no federal credit at all, a significant change from the credit's original schedule, which had been set to run at 30% through 2032 before stepping down gradually. For the exact rules on what counts, the IRS instructions for Form 5695 are the source to read.
For a $22,000 system, the credit used to bring net cost down to $15,400, with payback around 8.6 years at $1,800 in annual savings. Without it, net cost stays at the full $22,000, pushing payback out to roughly 12.2 years for the same annual savings, a meaningful difference worth factoring into any current decision, as reflected in the payback period calculator. This estimate assumes normal upkeep, and the maintenance cost vs savings net calculator breaks down what that upkeep costs year by year.
Leases and PPAs are owned by a third party, typically the installer or a financing company, who can still claim a separate commercial credit and may pass some of that value along through a lower rate. See the cash vs lease comparison for how that ownership structure changes the overall math, or the after tax savings calculator for other tax-related considerations. The IRS page on the residential clean energy credit states the current rules and the placed-in-service cutoff.
If your system was placed in service on or before December 31, 2025, you can still claim the 30% credit on that year's tax return, and unused credit amounts can generally be carried forward to future tax years. Confirm your specific situation with a tax professional. If your production estimate feels uncertain, the real world vs nameplate output gap calculator gives you a second check on annual output.
Questions
No, not for homeowners who buy their own system with cash or a loan. The 30% federal residential credit, Section 25D, expired for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act.
Substantially. For a $22,000 system, the credit used to bring net cost down to $15,400, with payback around 8.6 years. Without it, net cost stays at the full $22,000, pushing payback out to roughly 12.2 years for the same annual savings.
Indirectly, yes. Leases and PPAs are owned by a third party, typically the installer or a financing company, who can still claim the separate commercial credit and may pass some of that value along through a lower rate.
If your system was placed in service on or before December 31, 2025, you can still claim the 30% credit on that year's tax return, and unused credit amounts can generally be carried forward to future tax years.
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