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Is there still a federal solar tax credit?

Updated

General information, not a substitute for the advice of an attorney.

Short answer: Not for homeowners, for systems finished after 2025. The IRS states that the residential clean energy credit under section 25D "will not be allowed for any expenditures made after December 31, 2025" (IRS FS-2025-05). Commercial and utility-scale credits under sections 45Y and 48E were modified by the same law on different terms, which we could not open from a primary source for this page.

What changed and when

Public Law 119-21, enacted July 4, 2025 and commonly called the One Big Beautiful Bill, accelerated the termination of several energy credits. Treasury and the IRS issued Fact Sheet 2025-05 on August 21, 2025 to explain the new end dates (IRS news release IR-2025-86).

  • Section 25D, residential clean energy credit (rooftop solar, home batteries, and similar): no credit for expenditures made after December 31, 2025 (IRS).
  • Section 25C, energy efficient home improvement credit: no credit for property placed in service after December 31, 2025 (IRS).
  • Section 30C, alternative fuel vehicle refueling property (including home EV chargers): no credit for property placed in service after June 30, 2026 (IRS).
  • Section 45L (new energy efficient homes): no credit for homes acquired after June 30, 2026; section 179D deduction: not allowed for property whose construction begins after June 30, 2026 (IRS).

The installation-date rule

The date that matters for 25D is not when you signed or paid. The IRS says an expenditure is "treated as made when the original installation of the item is completed" (IRS FAQ 7). A system paid for in 2025 but installed in 2026 does not qualify. For a newly constructed or reconstructed home, the expenditure is "treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins," so a new home first occupied after December 31, 2025 also misses the credit even if payment was made earlier (IRS FAQ 7).

Commercial and utility-scale solar

The IRS fact sheet we opened covers only sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D (IRS). The phase-down dates for the clean electricity credits (45Y and 48E) that apply to solar farms and third-party-owned rooftop systems are in separate IRS guidance that we could not open, so we do not state them here. Note that EIA's April 2025 cost modeling still assumed a 1.50 cent per kWh production tax credit for solar PV (EIA AEO2025 LCOE report), which predates the law.

See rooftop solar and net metering by state, how long solar panels last, and the permit finder.

General information from the sources linked above, not legal, tax, or financial advice.

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