The 30% residential solar credit is gone. What replaced it is not a credit.
Section 25D ended for systems placed in service after 31 December 2025. Section 48E did not — and that asymmetry now decides how most American homes get solar.
The Residential Clean Energy Credit, §25D, is the one most people mean when they say "the 30% solar tax credit." The IRS states the position plainly: the credit applies to property "installed anytime from 2022 through December 31, 2025," and is "not available for any property placed in service after December 31, 2025."
The operative phrase is placed in service, not purchased. A system bought in December 2025 but energised in January 2026 does not qualify. The IRS draws that distinction explicitly — the credit attaches to the year the property is installed, not the year it was paid for.
What survived
§48E, the clean electricity investment credit, is the business-side equivalent, and it did not expire on the same schedule. A company that owns panels on a roof — under a lease or a power purchase agreement — is running a business asset and can still claim it.
That is the whole asymmetry. Buy the system yourself and there is no federal credit. Let a third party own it and the credit still exists, in their hands, priced into what they charge you. It is the single largest reason the residential market has tilted toward third-party ownership rather than cash and loan purchases.
Whether that is a good deal for a household is a separate question, and not one with a single answer. A lease or PPA provider claiming 30% does not hand a household 30%; they price some fraction of it into the payment and keep the rest. The only way to know your share is to compare the total 25-year cost of the PPA against the total 25-year cost of owning — which is what the ownership comparison in the calculator is for.
What this does to payback
Removing a 30% credit does not lengthen payback by 30%. It lengthens it by roughly the ratio of gross to net cost — a system that was $24,000 net of the credit now costs $30,000+, and every year of savings has to cover more principal before the line crosses zero. In high-rate states with strong self-consumption, the arithmetic still works. In cheap-power states that had marginal payback with the credit, it often no longer does.
What we do not know
Nothing in current guidance restores §25D. Proposals to revive a residential credit appear regularly and none has been enacted. This page will say so if that changes.
Sources
Run the numbers under these rules
The calculator already models the position described above — no federal residential credit on a purchased system, §48E in the hands of a third-party owner, and hourly settlement against your tariff's own export rule.
More policy
- The 4 July begin-construction deadline has passed. What that means for commercial projects.Net billing is the default now, and it changes what a solar panel is for