The federal solar tax credit in 2026: what the IRS says and what it means for a quote

What the IRS says

The federal credit most homeowners mean is the Residential Clean Energy Credit, section 25D of the tax code. The IRS’s page on it says the credit “equals 30% of the costs of new, qualified clean energy property for your home installed anytime from 2022 through December 31, 2025.” Its next sentence settles the question for new jobs: “The credit is not available for any property placed in service after December 31, 2025.” That page was last reviewed or updated on July 4, 2026.

The IRS’s One Big Beautiful Bill page gives the same end date in its table: section 25D is “Not allowed for any expenditures made after Dec. 31, 2025.” For a 2026 installation the current percentage is none, 0 percent. These are federal dates, so they’re the same in Michigan and California.

For property installed from 2022 through 2025, the credit was 30 percent of cost, with no annual or lifetime cap.

This page repeats what the IRS pages say. It isn’t tax advice, and a question about your own return belongs with whoever prepares it.

The installation date controls, not the payment date

Paying early doesn’t move the date. The IRS’s questions and answers on the change say “an expenditure … is treated as made when the original installation of the item is completed.” Paying by December 31, 2025 isn’t enough when the installation finishes in 2026.

So a contract that promises a federal credit on a system with a 2026 completion date doesn’t match what the IRS says. Ask the company which IRS page it’s relying on, and read that page’s date.

A system whose installation was completed in 2025 can still be claimed, and the IRS says unused credit carries forward.

Batteries are in the same section

Battery storage falls under section 25D too. A home battery finished in 2026 gets no federal credit either, and the battery storage guide covers what each state’s programs say about batteries.

Reading a quote in 2026

The price on the contract is the price you pay, and that changes how to read a quote:

• Any line that says “after the 30 percent credit” or “net cost after incentives” on a 2026 job describes a credit the IRS says isn’t available. Ask the company to take it out, or to show the IRS page it relies on.
• Cost per watt should be stated before any incentive. What to compare in solar quotes lists the other items to get in writing.
• A pitch of “no bill,” “free solar” or no money up front gets the warnings in the state sections below.

Michigan: what’s left to read about

The Michigan Public Service Commission’s news release of October 8, 2025 on distributed generation flags the federal One Big Beautiful Bill Act as accelerating sunsets of renewable tax credits. With no federal credit for a 2026 job, the next rules to read are your utility’s export credit, set out in net metering and distributed generation.

Property tax. Michigan’s State Tax Commission Bulletin 6 of 2020 says a photovoltaic system of not more than 150 kW whose annual output doesn’t exceed annual consumption is a normal-maintenance item. Under MCL 211.27(2)(p), the assessor doesn’t count it as an increase in the true cash value of residential property until the property is sold. After a sale the assessor may add its value.

Lansing Board of Water & Light. BWL’s rebate page, which is undated and doesn’t state its funding status, lists $500 per kW up to $2,000 (4 kW) for BWL customers only and shows the rebate as open.

Michigan Saves. Michigan Saves calls itself “The Nation’s First Nonprofit Green Bank.” It offers financing, not a rebate, and its financing runs through Michigan Saves authorized contractors.

EGLE’s MI Solar Access Program. This is a request for proposals for organizations, amended July 13, 2026, and it isn’t a homeowner rebate. EGLE’s own advisory says it isn’t “aware of any state or federal programs providing solar installation at no cost.”

Pitches to walk away from. Consumers Energy tells customers to avoid anyone who promises “you will not receive an electric bill” or offers solar “with no upfront cost.”

California: what’s left to read about

Property tax. Revenue and Taxation Code section 73 excludes a new active solar energy system from new-construction reassessment, and the section remains in effect only until January 1, 2027. Systems that qualify before then continue to be excluded until a change in ownership. The Board of Equalization’s 2024 letter to assessors says the exclusion applies to construction in process or completed before January 1, 2027 unless extended. A system completed on or after that date falls outside the exclusion as the statute stands.

SGIP battery incentives, as of October 23, 2026. The program administrators’ step tracker shows the Small Residential Storage step at $0.15 per Wh as Closed for CSE, SCE, SoCalGas and PG&E. The Residential Solar and Storage Equity budgets list $1.10 per Wh for storage and $3.10 per W for solar, are for low-income residential customers, and show as closed or waitlisted for the administrators the tracker lists.

SMUD. SMUD’s battery page says its upfront enrollment incentive is reduced from $500 per kWh (up to $10,000 per household) to $300 per kWh (up to $6,000 per household). Projects had to be submitted for interconnection by September 22 and enrolled by December 31, 2026 to get the higher amount.

LADWP. In its Solar Rooftops program, LADWP installs and owns rooftop solar for qualified residential customers who otherwise may not be able to take part because of the high cost. LADWP’s Solar Programs page doesn’t print what a Solar Rooftops customer receives, so that’s the question to put to LADWP.

Down payments. Under California’s home improvement rules, which CSLB applies to residential solar, a contractor can’t ask for or take a down payment of more than $1,000 or 10 percent of the contract price, whichever is less.

What to ask each company

Ask for the completion date it expects, the total price including financing, and the cost per watt before any incentive. If any figure on the quote depends on a federal credit, ask for the IRS page and date behind it, and hold it against the dates above before you sign.