What Changed in 2026
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made major changes to solar and clean energy tax credits. Here's what you need to know.
Residential Solar Tax Credit (Section 25D) — ELIMINATED
The 30% federal residential solar tax credit is gone for any expenditure made after December 31, 2025. There is no phase-down — it went straight from 30% to 0%. Installations completed and paid for in 2025 may still qualify for the credit on your 2025 tax return.
Commercial Solar Tax Credit (Section 48E) — PHASED DOWN
The commercial Investment Tax Credit (ITC) was reduced from 30% to 6% for projects beginning construction after July 4, 2025. Projects that began construction before this date may still qualify for 30% if they meet safe harbor requirements. Bonus credits (energy community, domestic content) may still apply to the 6% base, potentially bringing it to 24% or higher for qualifying projects.
What This Means for You
Homeowners: No federal tax credit for residential solar installed in 2026 or later. State and local incentives may still apply.
Businesses: Reduced federal ITC (6% base, potentially higher with bonuses). Consult your tax advisor.
Utility-scale: Same 6% base ITC with potential bonus stack. PTC election may be available.
State & Local Incentives
Many states, utilities, and municipalities still offer rebates, tax credits, property tax exemptions, and SREC programs. These vary by location and change frequently. We recommend checking the DSIRE database (Database of State Incentives for Renewables & Efficiency) for current programs in your area.
Tax Disclaimer
PES Supply does not provide tax, legal, or financial advice. Tax credits, rebates, and incentive eligibility depend on individual circumstances and change over time. The information above is for general informational purposes only and should not be relied upon as tax advice. Always consult a qualified tax professional and/or attorney before making purchasing decisions based on tax incentives.