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The federal residential solar ITC expired January 1, 2026. Many states still offer rebates, tax credits, property tax exemptions, and favorable net metering — worth thousands of dollars on a typical installation.
Federal Residential ITC: Expired
The 30% federal Investment Tax Credit for residential solar installations expired on January 1, 2026. The Commercial ITC (30%) remains active for businesses beginning construction before July 4, 2026.
EXPIRED as of January 1, 2026. This credit was 30% of the total installed cost of a residential solar energy system, with no upper cap. It is no longer available for new installations.
The Residential Clean Energy Credit was established under the Inflation Reduction Act of 2022 at 30% through 2032, subsequently changed, and ultimately expired for new residential installations placed in service after December 31, 2025. Homeowners who installed and placed in service a qualifying solar system on or before December 31, 2025 may still claim the credit on their 2025 federal tax return (filed in 2026) using IRS Form 5695. If the credit exceeded their 2025 tax liability, any carryforward is applied to subsequent years' tax returns until exhausted. No new residential solar installations commissioned in 2026 or later are eligible. The credit covered solar PV panels, inverters, mounting equipment, wiring, battery storage systems, and installation labor costs.
30% federal tax credit on the full cost of a qualifying commercial solar energy system. Applies to businesses, nonprofits (via direct pay/elective pay), and third-party owners of commercial solar installations.
The Commercial Solar ITC under IRS Section 48 remains active at 30% for qualifying businesses. To claim the full 30% base credit, construction must begin by July 4, 2026 (the 'commence construction' deadline under safe harbor provisions), and the system must be placed in service (operational) by December 31, 2027. Systems that miss either deadline may be subject to a reduced credit rate. The credit applies to the full installed cost including equipment, labor, permitting, and interconnection. Eligible entities include C-corps, S-corps, partnerships, and LLCs. Tax-exempt organizations (nonprofits, municipalities, tribal governments, schools) may use the elective pay (direct pay) option to receive the credit as a direct payment from the IRS rather than a tax offset. MACRS accelerated depreciation (5-year schedule for solar) provides additional tax benefit layered on top of the ITC. Consult a tax advisor for proper claim procedures under IRS Form 3468.
Additional 10 percentage points added to the base Commercial ITC for qualifying systems that use domestically manufactured steel, iron, and manufactured products. Total credit becomes 40% (30% base + 10% bonus).
The Domestic Content Bonus under IRS Notice 2023-29 and subsequent guidance adds 10% to the base Commercial ITC when a project meets domestic manufacturing requirements. Requirements: (1) All steel and iron used in structural components must be produced in the US; (2) A minimum percentage of the manufactured products' cost must be attributable to US-manufactured components (currently 40%, rising to 55% for projects starting construction after 2026). Solar panels must use US-manufactured cells and modules to count toward the manufactured products threshold. The bonus applies to systems that also satisfy the prevailing wage and apprenticeship (PWA) requirements necessary to claim the full 30% base credit. Documentation of domestic content must be maintained and may be subject to IRS audit. Treasury guidance provides a 10% 'safe harbor' adder for tracking and verification.
Additional 10 percentage points added to the base Commercial ITC for qualifying systems located in designated Energy Communities — areas affected by coal and fossil fuel industry closures. Total credit becomes 40% (30% base + 10% bonus).
The Energy Community Bonus under IRS Notice 2023-29 adds 10% to the base Commercial ITC when a project is sited in a qualifying Energy Community. There are three categories of Energy Communities: (1) Brownfield sites (former industrial or hazardous waste sites); (2) Statistical areas with significant employment in coal, oil, or natural gas industries, or that have had a coal mine closure since 1999 or coal-fired electric generating unit retirement since 2009; (3) Census tracts or adjoining census tracts where a coal mine has closed since 1999 or a coal power plant has retired since 2009. The Department of Energy provides an interactive mapping tool at the application URL to verify whether a specific project location qualifies. Both the Domestic Content Bonus and Energy Community Bonus can be stacked for a potential total credit of 50% (30% base + 10% domestic + 10% energy community), provided all requirements are met simultaneously.
Arizona
Arizona Residential Solar Tax Credit: 25% of the installed cost of a qualifying solar energy device, up to a maximum credit of $1,000.
Arkansas
Arkansas Net Metering (Grandfathered) → Net Billing: Arkansas Act 464 (2019) and subsequent PSC orders preserved 1:1 retail-rate net metering for systems interconnected before December 31, 2022 (grandfathered for 20 years). New residential systems from 2023 onward operate under net billing with exports compensated at avoided cost — typically 50–60% of retail.
California
California Solar Initiative (CSI): Program is fully subscribed and closed. Historically provided $0.25–$1.90/W depending on system size and utility territory. No longer accepting applications.
Colorado
Colorado Sales Tax Exemption for Solar: Full state sales tax exemption (2.9%) on residential solar PV equipment and installation. Some local jurisdictions also exempt; combined savings 6–8% on equipment depending on locality.
Connecticut
Residential Renewable Energy Solutions (RRES): Two compensation tariffs: Buy-All Tariff (~$0.30/kWh paid by utility for all generation, customer continues buying retail) or Netting Tariff (1:1 monthly netting + production-payment for net export). Tariff selected at enrolment for 20 years.
Florida
Florida Solar Energy Sales Tax Exemption: Full exemption from Florida's 6% state sales tax on the purchase of solar energy equipment and related components.
Georgia
Georgia Power Net Metering: Monthly net metering for residential customers up to 10 kW under Georgia Power's tariff schedule. Surplus credits compensated at avoided-cost rate (well below retail). Limited monthly export-credit cap.
Hawaii
Hawaii Renewable Energy Technologies Income Tax Credit (RETITC): 35% of qualified solar PV system cost, capped at $5,000 per system for residential property. Capped at $500,000 for commercial property. The credit is non-refundable but can be carried forward.
Illinois
Illinois Shines (Adjustable Block Program — SREC): 15-year SREC contracts paid lump-sum upfront. Residential systems ≤ 25 kW receive approximately $40–$80 per SREC. A 7 kW system generating ~8.5 MWh/year over 15 years earns ~127 SRECs, or roughly $5,000–$10,000 paid upfront at contract signing.
Indiana
Indiana Net Metering (Phased Out 2022) → Excess Distributed Generation Tariff: Indiana phased out 1:1 retail net metering under SEA 309 (passed 2017), with the final IOU transitions completed by 2022. New residential prosumers receive Excess Distributed Generation (EDG) compensation at approximately 1.25× the utility's avoided cost — typically 60–75% of retail.
Kentucky
Kentucky Net Metering (Replaced 2020) → Net Billing: Senate Bill 100 (2019) replaced Kentucky's 1:1 retail-rate net metering with utility-specific net billing, with exports compensated at locational avoided cost (LAC) rather than retail. New residential customers from 2020 onward operate under each utility's PSC-approved compensation rate.
Louisiana
Louisiana Net Billing (Replaced 2019): Louisiana Public Service Commission Order 4 (2019) phased out 1:1 net metering for new customers. New residential prosumers receive net billing with exports compensated at the utility's avoided cost — typically 50–65% of retail.
Maine
Maine Net Energy Billing (NEB): Two NEB programs: Tariff Rate (residential, ≤ 25 kW) at retail rate; Kilowatt-Hour Credit (residential, ≤ 25 kW) at retail rate with credit roll-forward. Both subject to ongoing PUC-led rate adjustments.
Maryland
Maryland Residential Clean Energy Grant Program: $1,000 grant per residential solar PV installation, paid by the Maryland Energy Administration after system commissioning. Limited program budget; first-come-first-served.
Massachusetts
Solar Massachusetts Renewable Target (SMART) Program: Fixed-rate per-kWh compensation for 10 years from system commissioning. Base rate ~$0.10–$0.15/kWh depending on utility territory and program block. Storage adder: $0.0247–$0.0625/kWh additional. Income-eligible adder: ~$0.06/kWh.
Michigan
Michigan Distributed Generation Program: Monthly net metering at retail rate up to 10 kW residential. Excess generation compensated at the utility's power-supply-component rate (less than retail). DTE Energy and Consumers Energy participate.
Minnesota
Xcel Energy Solar*Rewards: Performance-based incentive of $0.07/kWh on production for 10 years. Available to Xcel Energy MN residential customers ≤ 20 kW. Annual program cap; first-come-first-served.
Missouri
Evergy Solar Rebate (Closed to New Applicants): Evergy's residential solar rebate of $0.25/W (capped at $2,500) for Missouri customers closed to new applicants in 2023. Successor utility programmes are limited.
Nevada
Nevada Tiered Net Metering: NV Energy net metering tiered by enrolment cohort. Tier 1 (closed) at 95% retail; Tier 2 (closed) at 88%; Tier 3 (closed) at 81%; Tier 4 (current) at 75% of retail rate for exported energy. Locked at enrolment for 20 years.
New Hampshire
NH PUC Residential Solar Rebate Program: New Hampshire Public Utilities Commission Renewable Energy Fund offers $0.20/W residential solar rebate, capped at $1,000 per system. Funded by the state Renewable Portfolio Standard alternative compliance payments.
New Jersey
Successor Solar Incentive Program (SuSI) — TREC-2: Transition Renewable Energy Certificates (TRECs / TREC-2) priced at approximately $85 per MWh for residential systems registered in 2026. Each MWh of solar generation produces 1 certificate, valid for 15 years from system commissioning.
New Mexico
New Mexico Solar Market Development Tax Credit: 10% of solar PV cost, capped at $6,000 per residence. Non-refundable; carries forward up to 5 years. Annual statewide cap of $12 million issued first-come-first-served.
New York
NY-Sun Incentive Program: Approximately $0.20 per watt (W) of installed capacity for residential systems, up to a maximum of $5,000. Actual per-watt incentive varies by utility territory and available program budget.
North Carolina
North Carolina Solar Property Tax Exemption (80%): 80% exemption from property tax on the assessed value added by a qualifying solar PV system on residential or business property.
Ohio
Ohio SREC Program (Modest): Each MWh of solar generation produces 1 OH-SREC, sold on the Ohio market typically at $5–$15 per certificate — significantly lower than NJ, MA, or PA SREC markets. A 7 kW residential system earns ~$40–$120/year in SREC revenue.
Oklahoma
Oklahoma Zero-Emission Facilities Tax Credit (Sunset for Solar): Oklahoma's zero-emission facilities tax credit (68 OS §2357.32A) does not apply to residential rooftop solar. Utility-scale and commercial solar facilities have separate (capped, sunset-bound) credit treatment.
Oregon
Oregon Solar + Storage Rebate Program: Solar PV rebate $0.20/W for residential customers (max $5,000 for non-low-income; $7,500 for low-income). Battery storage rebate $300/kWh up to $2,500 for non-low-income (higher for low-income). Administered by Oregon Department of Energy.
Pennsylvania
Pennsylvania Solar Renewable Energy Certificate (SREC): Each MWh of solar PV generation produces 1 PA-SREC, sold on the PA SREC market typically at $30–$45 per certificate. A 7 kW residential system generating ~8 MWh/year earns ~$240–$360 annually.
Rhode Island
Renewable Energy Growth Program (REG): Performance-based incentive paid via a Tariff Rate set per program year and locked at enrolment for 15 years. 2026 residential PV ≤ 25 kW rate approximately $0.27–$0.32/kWh (varies by program block).
South Carolina
South Carolina Solar Energy System Credit: 25% state income tax credit on residential solar PV system cost, capped at $3,500 per year (or 50% of state tax liability, whichever is less). Unused credit carries forward up to 10 years.
Tennessee
TVA Green Connect / EnergyRight (Successor Programs): Tennessee Valley Authority closed Green Power Providers (GPP) and Dispersed Power Production (DPP) to new participants in 2019–2020. Successor distributed solar programmes are limited; most residential prosumers operate under the local power company's interconnection rules with no TVA-level performance payment.
Texas
No Texas State Income Tax Credit: Texas has no state income tax and therefore offers no state-level solar income tax credit. Residents cannot claim a state tax credit for solar installations.
Utah
Utah Residential Solar Tax Credit (Sunset): Utah's state residential solar tax credit completed its statutory phase-out in 2023 (zeroing in 2024). New residential PV installs receive no Utah-state PIT credit; federal credits expired with Section 25D on 2026-01-01.
Vermont
Vermont Net Metering: Renewables-rich Tier 1 net metering at retail rate plus a Renewable Energy Credit (REC) adder of $0.01–$0.03/kWh depending on system tier and host site type. Total effective compensation typically $0.20–$0.24/kWh on residential.
Virginia
Virginia Net Metering: 1:1 retail-rate net metering for residential systems ≤ 25 kW under Dominion Energy Virginia and Appalachian Power. Subject to programmatic caps and standby charges for larger systems.
Washington
Washington Sales Tax Exemption for Solar: Full state and local sales tax exemption (~10%) on solar PV equipment ≤ 100 kW capacity and battery storage installed for residential or commercial use. Saves approximately $1,500 on a $15,000 system.
Wisconsin
Focus on Energy Solar Cash-Back Rewards: Focus on Energy, Wisconsin's statewide energy efficiency and renewables programme funded by IOU ratepayers, offers a flat residential solar reward — typically $500 per qualifying installation, plus equipment-specific add-ons. Programme funding is annually budget-capped.
Incentive data last reviewed . Programs change — always verify with the administering agency before making purchasing decisions.
The residential federal ITC (Section 25D) expired on January 1, 2026. Systems placed in service in 2025 are eligible; systems placed in service in 2026 or later are not. The Commercial ITC (Section 48) still applies to businesses beginning construction before July 4, 2026.
California's SGIP (battery rebate ~$200/kWh), New York's NY-Sun + property-tax exemption, Massachusetts's SMART program, Illinois's Solar For All, and Colorado's state income-tax credit are among the strongest. Check your individual state page for current rates and caps.
Yes, under NEM 3.0 (NBT) — but exports are credited at avoided-cost rates that average 75% lower than retail. This dramatically changes battery economics: pairing solar with storage is now almost mandatory in California for acceptable payback.
Possibly, in proportion to the business use. This is a complex area — consult a CPA. The Commercial ITC requires business use and depreciation, and bonus depreciation rules have phased down.
Frequently. Rebate budgets often run out mid-year; tariff structures change at fiscal-year boundaries; property-tax and sales-tax exemptions are generally more stable. We review each state page at least every quarter.