What happened to the federal credit
The residential clean energy credit equaled 30 percent of the cost of qualified property, including solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells and battery storage of at least 3 kWh. The IRS FAQ says the credit will not be allowed for any expenditures made after December 31, 2025, and that an expenditure for an item is treated as made when its original installation is completed.
If your system was finished in 2025, claim the credit on your 2025 return with Form 5695. If it is finished in 2026 or later, the homeowner credit does not apply. Leases and power purchase agreements work differently, and the rules for them changed too. Ask any installer who offers one to explain the tax treatment in writing, and ask a tax professional.
Source: IRS FS-2025-05 and the IRS residential clean energy credit page, read October 10, 2026.
Not tax advice
What incentives remain
- Net metering or export credits. Your utility credits you for power you send to the grid, at a rate that differs a lot by state and utility. See net metering explained.
- State incentives. Some states offer rebates, tax credits, sales tax or property tax exemptions. Search the DSIRE database.
- Utility programs. Some utilities pay for batteries, offer bill credits or run solar programs. Ask yours.
- Community and shared solar. In some states you can subscribe to a share of a solar project and get bill credits without a roof system.
Where rooftop solar is most common
EIA collects the number and size of net-metered residential systems from utilities. This table ranks places by net-metered residential solar capacity per 1,000 residential customers. It shows where solar is common, not which state has the strongest incentives.
| State | kW per 1,000 customers | Net-metered homes | Capacity (MW) |
|---|---|---|---|
| Hawaii | 1,600 | 108,413 | 718 |
| California | 1,394 | 2,290,366 | 20,041 |
| Maine | 1,279 | 20,556 | 958 |
| Massachusetts | 1,054 | 217,188 | 3,077 |
| Arizona | 983 | 339,321 | 3,151 |
| Nevada | 918 | 143,765 | 1,226 |
| Connecticut | 843 | 122,249 | 1,333 |
| New Jersey | 815 | 228,959 | 3,082 |
| District of Columbia | 640 | 22,531 | 208 |
| Vermont | 581 | 10,053 | 183 |
Source: U.S. Energy Information Administration, Form EIA-861 (final 2025 data), net metering schedule, residential. Capacity is as utilities report it to EIA. It counts net-metered systems only, not every system.
How to judge a solar offer without the credit
- Get your last 12 months of kWh and your all-in price per kWh. Your bill shows both.
- Ask for the system's expected yearly kWh from the installer, with the assumptions, and check them against your roof and shade.
- Ask how exports are credited under your utility's rules, and whether the rule can change.
- Multiply the kWh you would offset by your price to estimate yearly savings, then compare it with the total price after any local incentives.
- Get at least three written quotes, check licenses and read the contract, including the warranty and what happens if you sell the home.
Use the electricity usage calculator to see your total, and the electric bill calculator to test a change in price.
Sources and further reading
Frequently asked questions
Is there still a federal tax credit for solar panels?
Not for a homeowner’s expenditures made after December 31, 2025, according to the IRS. Systems finished in 2025 can be claimed on the 2025 return.
What incentives are left for solar?
Net metering or export credits, and any state or utility rebates, tax breaks and programs. They vary by place, so search the DSIRE database and ask your utility.
Does net metering still exist?
It exists in many places, with rules that differ widely. See our net metering guide and ask your utility how it credits exports.
Should I still go solar?
That depends on your usage, your price per kWh, the credit your utility gives for exports, and the quote. Run the numbers with your own bill and get several quotes.