What the credit was
Short answer: The federal Residential Clean Energy Credit let homeowners claim 30% of a solar system's cost against federal income tax. It applied only to systems you bought and owned. The One Big Beautiful Bill (Public Law 119-21, signed July 4, 2025) ended it December 31, 2025.
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.
Federal solar tax credit: common questions
Is the 30% federal solar tax credit still available in 2026?
Not for a system you buy and own. The federal Residential Clean Energy Credit (Section 25D) was 30% for systems placed in service through December 31, 2025. The One Big Beautiful Bill, signed July 4, 2025, ended that credit on December 31, 2025, with no phase-down. For an owned residential system placed in service in 2026, the federal residential credit is 0%.
What happened to the federal solar tax credit?
The 30% residential credit had been scheduled to run through 2032 under earlier law. The One Big Beautiful Bill (Public Law 119-21) moved its end date to December 31, 2025. So 2025 was the last year a homeowner could place a system in service and claim the 30% Section 25D credit on a purchased, owned system.
Is there any federal solar credit left for 2026?
There can be, but indirectly. A separate business-side credit (Section 48E) still applies to some third-party arrangements, such as a solar lease or a power-purchase agreement, generally through 2027. In those structures the company that owns the system claims the credit and may pass some benefit through in your terms. You, the homeowner, are not claiming a 30% credit on your own return in that case.
Does solar still make sense in Arizona without the federal credit?
For most well-positioned Arizona homes, yes. The federal credit shortened payback, but it was never the main saving. The durable benefit is no longer buying as much power from APS or SRP at a rate that keeps climbing. The Arizona state credit, worth up to $1,000, also still applies. The honest number for your home comes from the free savings review.
Where can I confirm this myself?
The IRS publishes the Residential Clean Energy Credit details and a set of FAQs on the changes made by the One Big Beautiful Bill (Public Law 119-21). Tax law is specific to your situation, so confirm with a qualified tax professional before you file. We are a solar installer, not a tax advisor.