What the credit was
The federal Residential Clean Energy Credit, Section 25D of the tax code, let a homeowner claim 30% of the cost of a qualifying solar system as a credit against federal income tax. It applied to systems a homeowner bought and owned, and under earlier law it was scheduled to run well into the 2030s. For most of that run it was the single biggest line item making solar pencil out quickly.
What changed for 2026
The One Big Beautiful Bill, Public Law 119-21, was signed on July 4, 2025. Among other changes, it moved the end date of the Section 25D residential credit to December 31, 2025, with no gradual step-down. That makes 2025 the last year a homeowner could place a purchased system in service and claim the 30%. A system you buy and own in 2026 does not earn the federal residential credit.
Figures here reflect the IRS guidance on the Residential Clean Energy Credit and the OBBB changes. Tax law is specific to your situation; confirm with a qualified tax professional.
Is anything still open?
Yes, but it works differently. A separate business-side credit, Section 48E, still applies to certain third-party arrangements such as a solar lease or a power-purchase agreement, generally through 2027. In those structures the company that owns the equipment claims the credit and may reflect some of that value in your terms. It is not you claiming a 30% credit on your own return. We will walk through whether an ownership or third-party path fits you, and we are honest that owning usually wins long-term.
Does the math still work?
For most well-positioned Arizona homes, it does. The federal credit shortened payback, but it was never the main reason solar saves money. The durable saving is no longer renting power from APS or SRP at a rate that rises almost every year, and the Arizona state credit (up to $1,000) still applies. See the rising Arizona electric rates you are getting off of, read how residential solar in Arizona works, and run your own bill through the savings calculator.