Updated September 1, 2026. This is general information, not tax advice.
The federal homeowner solar credit changed from a future deadline to a historical one. The IRS says the Residential Clean Energy Credit under section 25D is not allowed for expenditures made after December 31, 2025. California homeowners evaluating a purchase in 2026 should not subtract the former 30% homeowner credit from a new system quote.
What the deadline means in 2026
- A new homeowner-owned system purchased in 2026 should be evaluated without the former section 25D credit.
- If your project or payments crossed the 2025 deadline, eligibility depends on the law and your specific facts. Keep contracts, invoices, proof of payment, inspection records, and placed-in-service documentation and consult a qualified tax professional.
- Do not rely on a salesperson’s verbal assurance that a tax credit is guaranteed or that everyone receives the same benefit.
Solar can still be compared without the former credit
The decision now depends more heavily on the installed cash price, financing cost, electricity usage, roof condition, utility tariff, expected self-consumption, maintenance, and how long you expect to own the property. Under California’s Net Billing Tariff, the CPUC says exported generation is credited based on its value to the grid, so a proposal should model when your household uses and exports energy—not only annual production.
Questions to ask about leases and power-purchase agreements
In a lease or power-purchase agreement, a third party owns the equipment. Business clean-energy rules differ from the former homeowner credit and continue to change. Ask for the total payment schedule, annual escalator, purchase and transfer options, maintenance obligations, production guarantee, roof-work process, and the assumptions behind any claimed incentive value. Do not treat an installer statement that it is “passing through 30%” as equivalent to a homeowner tax credit.
California programs and consumer protections
Targeted California, utility, local, and income-qualified programs may still be available. Battery incentives can depend on customer eligibility, location, medical needs, wildfire risk, budget availability, and program rules. Verify eligibility directly with the current administrator before signing a contract.
The CPUC recommends reading the California Solar Consumer Protection Guide before signing. In covered utility territories, providers must collect the customer’s initials and signature. The guide advises consumers to verify the CSLB licence, understand total and monthly costs, review savings assumptions, keep their paperwork, and use the applicable cancellation period.
A better 2026 decision process
- Compare at least three written proposals using the same electricity history.
- Request both the cash price and total financed cost, with solar and storage separated.
- Verify the contractor and salesperson through CSLB.
- Compare the exact equipment, production assumptions, warranties, and responsible installer.
- Model savings under your actual utility tariff and test conservative scenarios.
- Have a tax professional review any tax claim and a financial professional review complex financing when appropriate.
Continue with the updated 2026 California solar cost guide, browse the installer directory, or review how to evaluate an installer.
Primary sources
Was this helpful?
