- The 30% federal homeowner credit (Section 25D) ended for expenditures made after December 31, 2025, so most 2026 buyers cannot claim it [IRS OBBB FAQ, as of 2026; SEIA, as of 2026].
- State programs still pay: Massachusetts SMART runs about $0.03/kWh for 20 years, and Texas utility rebates reach up to $6,000 [DSIRE, as of 2026; solar.com, as of 2026].
- Average U.S. residential power runs about 18.83 cents per kWh, and high bills are the main reason solar incentives matter [EIA, as of March 2026].
- SRECs and net metering keep paying you after install, and both vary by state and utility [DSIRE, as of 2026].
- Lease and PPA options can mean $0-up-front for those who qualify, but you do not own the system and do not claim a federal credit.
- Check which incentives apply to your address before you sign anything.
Most U.S. homes pay about 18.83 cents per kWh for electricity (EIA retail sales, residential, as of March 2026), and incentives are what turn those rising bills into a reason to go solar. The catch for 2026 is that the headline incentive changed: the federal homeowner credit is gone, but a stack of state, utility, and bill-credit programs still exists. This guide shows what is real this year and how to find what applies to your address.
The four layers of solar incentives
Solar incentives in the United States stack in four layers. Knowing which layer a salesperson is quoting keeps you from double-counting savings or banking on a credit you cannot claim.
| Incentive layer | What it is | Who claims it | 2026 status |
|---|---|---|---|
| Federal residential (Section 25D) | A 30% credit on a homeowner-owned system | The homeowner | Ended for expenditures made after December 31, 2025 (IRS, SEIA) |
| Federal commercial (Section 48E) | A 30% investment credit on the system itself | The business that owns a lease or PPA system | Applies to projects placed in service through 2027, with a begin-construction safe harbor by July 4, 2026 (IRS, SEIA) |
| State programs | Tax credits, rebates, SRECs, and tax exemptions | Usually the homeowner | Varies by state (DSIRE) |
| Net metering | A bill credit for the power you export | The homeowner | Varies by utility and state (DSIRE) |
Why the layers matter: federal, state, and utility programs are set by different bodies and change on different timelines. The single best free database for what your state and utility offer is the federally funded DSIRE (Database of State Incentives for Renewables and Efficiency), which tracks programs state by state.
Federal credits: what changed in 2026
The big change is that the homeowner federal credit is gone. The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, under the One Big Beautiful Bill Act, so a homeowner who buys solar with cash or a loan in 2026 cannot claim it (IRS OBBB FAQ, as of 2026; SEIA bill summary, as of 2026). If anyone still tells you that a 2026 homeowner gets a 30 percent federal credit, that claim is out of date, because the credit ended after December 31, 2025. For the full timeline, see what the federal solar tax credit change means in 2026.
For a full breakdown of the state and federal incentives a New Jersey homeowner can actually use, see New Jersey solar tax credits in 2026.
One federal exception exists, and it is not yours to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or PPA system, not by the homeowner, and it runs for projects placed in service through 2027, with a begin-construction safe harbor by July 4, 2026 (IRS Clean Electricity Investment Credit, as of 2026; SEIA tax policy, as of 2026). For a leased system you do not file for a federal credit yourself; the company that owns the panels does, and any benefit reaches you only through the lease or PPA price. The 25D homeowner credit, by contrast, ended after December 31, 2025.
Incentive programs and dates change often, and federal tax forms can lag the law. Confirm any figure against the linked government or state source before you decide, and ask a tax professional about your own situation. MySolarFY does not provide tax advice.
State and local incentives that still pay
This is where the real 2026 money is for most homeowners. State and utility programs were not touched by the federal change, and several are generous. A few live examples:
| State | Headline 2026 program | Typical value |
|---|---|---|
| Massachusetts | SMART production incentive | About $0.03/kWh for systems up to 25 kW, paid for 20 years (about $0.06/kWh for low-income customers) (DSIRE) |
| Massachusetts | State income-tax credit plus tax exemptions | 15% of cost up to $1,000; solar exempt from the 6.25% sales tax and from added property tax for 20 years (EnergySage MA) |
| Texas | Utility rebates (no statewide credit) | Up to $6,000 (AEP SMART Source), $2,500 (Austin Energy), plus a 100% property-tax exemption (solar.com, SolarReviews) |
| Rhode Island | Renewable Energy Growth (REG) | About $0.27/kWh paid for 15 to 20 years (NuWatt) |
| New Hampshire | Net metering | Credit terms locked by state law through 2040 (NuWatt) |
Common state incentive types to look for: an upfront utility or state rebate, a state income-tax credit, a production-based payment like SMART or REG, an SREC market, a sales-tax exemption, and a property-tax exemption so your home value can rise without raising your tax bill. Not every state offers all six, which is why a homeowner in Massachusetts and one in Texas chase very different programs. Look your state up on DSIRE to see your exact list.
See what solar programs are available in your ZIP code
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Net metering and SRECs: the incentives that keep paying
Net metering pays you for the power you send back to the grid. When your panels make more than your home uses, the extra flows to the grid and your utility credits your bill. The value of that credit is the difference that matters: some states still credit exports at the full retail rate, while others, like California under its net-billing rules, pay a lower export rate. New Hampshire is an outlier that locked its terms through 2040 (NuWatt, as of 2026). Because the rules are set state by state, check yours and read how net metering credits your solar exports before you size a system.
SRECs pay you for generating clean power, separate from your bill. An SREC, or Solar Renewable Energy Certificate, is a tradable certificate created when your system generates a set amount of solar electricity. In states with an SREC market, such as Massachusetts, New Jersey, Maryland, and Illinois, utilities buy these certificates to meet renewable-energy requirements, so you earn money from production on top of your net-metering savings (DSIRE, as of 2026). SREC prices move with the market and are not a fixed national number, so treat any quoted SREC income as an estimate, not a guarantee.
Production is what powers all of these, so estimate your roof’s output first with NREL’s free PVWatts calculator. The more your system produces, the more your net metering, SRECs, and production incentives are worth.
How you pay changes which incentives you can use
The way you finance solar decides who owns the system, and ownership decides who claims the incentives. This is the single most misunderstood part of a 2026 solar quote.
| How you pay | Up-front cost | Who owns the system | Incentives you can use |
|---|---|---|---|
| Cash | Full system price | You | State programs, net metering, SRECs |
| Solar loan | Little or none, financed over time | You | State programs, net metering, SRECs |
| Lease or PPA | $0-up-front where you qualify | A third-party company | The company claims any business credit; you get a set rate and avoid up-front cost |
If you own the system (cash or loan), you keep the state rebates, SRECs, and net-metering credits directly. If you lease or sign a PPA, the company that owns the panels keeps the business-side incentives, and your benefit is a lower or fixed power price with no up-front cost. Neither path gives a 2026 homeowner the federal residential credit, since that credit ended after December 31, 2025. For a deeper payback comparison, see the financial case for whether solar panels are worth it.
How to find the incentives you actually qualify for
There is no single national list that fits every home, because your incentives depend on your state, your utility, and how you pay. A simple, neutral way to check:
- Look up your state and utility on DSIRE, the federally funded incentive database.
- Open your utility’s solar page for net-metering terms and any local rebate.
- Confirm what you own. Cash and loan keep the incentives with you; lease and PPA do not.
- Ask any installer to show the source for every incentive they quote, with its current amount and date.
- Get more than one written quote and compare the production estimate, the equipment warranty, and the financing terms side by side. For a checklist, see the right questions to ask a solar installer.
Rather than trusting a “best incentives” list, screen the numbers yourself against the source. A real program will always have an official page you can read.
For a state example of how export credits add up, see New Jersey’s net metering and SREC-II program.
Frequently asked questions
What happened to the federal solar tax credit? The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, under the One Big Beautiful Bill Act. A homeowner who buys solar in 2026 with cash or a loan cannot claim it. A separate commercial credit (Section 48E) can apply to leased and PPA systems, but the business that owns the system claims it, not the homeowner. See our guide on what the federal solar tax credit change means in 2026.
What solar incentives can I get in 2026? Plenty, depending on where you live. State programs were not affected by the federal change and include upfront rebates, state income-tax credits, production payments like Massachusetts SMART (about $0.03/kWh for 20 years), SREC markets, and sales-tax and property-tax exemptions. Net metering still credits the power you export in most states. The clearest way to see your list is to look up your state and utility on the DSIRE database (dsireusa.org).
How do I find the incentives for my state and utility? Start with DSIRE, the federally funded Database of State Incentives for Renewables and Efficiency, which tracks programs state by state (dsireusa.org). Then open your own utility’s solar or net-metering page for the local rebate and export-credit terms. Finally, ask any installer to show the official source and current amount for every incentive they quote. Programs and dollar amounts change, so a figure without a date and a source link is a red flag.
What is an SREC, and how does it pay me? An SREC, or Solar Renewable Energy Certificate, is a tradable certificate created when your system produces a set amount of solar electricity. In states with an SREC market, such as Massachusetts, New Jersey, Maryland, and Illinois, utilities buy these certificates to meet renewable-energy rules, paying you for production on top of your bill savings (DSIRE). Prices move with the market and are not a fixed national number, so treat any quoted SREC income as an estimate rather than a guarantee.
Does net metering still exist in 2026? Yes in most states, but the terms vary. Some states still credit exported power at the full retail rate, while others use a lower export rate, such as California’s net-billing rules. New Hampshire locked its terms by law through 2040 (NuWatt). Because the rules are set state by state and by utility, check your specific utility before sizing a system, and read how net metering credits your solar exports for the mechanics.
What does “$0-up-front” solar actually mean? It usually means a lease or a power purchase agreement (PPA), where a third-party company owns the panels and you pay nothing at installation. You pay a monthly amount or a set price per kWh instead, often for 20 to 25 years, sometimes with an annual price escalator. Because you do not own the system, the company keeps any business incentives, and total payments over the term can exceed a cash purchase. It is an eligibility-based option, not free solar, so compare it against owning before you sign.
Reviewed by the MySolarFY team. Figures were verified against the linked federal, state, and utility sources as of June 2026; incentive amounts and dates change, so confirm current terms with each source before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY team and how we work.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase. Homeowners with a lease or PPA do not get the federal residential credit that ended after December 31, 2025; the company that owns the system claims any business credit. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
