Should You Go Solar In 2026?

"The most consequential shift for anyone considering rooftop solar in 2026 is the expiration of Section 25D, the Residential Clean Energy Credit. That 30% credit, which was worth up to $9,000 on a $30,000 system, is no longer available for home solar installations. The One Big Beautiful Bill, signed July 4, 2025, accelerated the phase-out that the Inflation Reduction Act had originally extended through 2034."

"The Clean Electricity Investment Credit (Section 48E), the commercial counterpart to the expired residential credit, was preserved in the One Big Beautiful Bill. It is available to businesses that own solar installations, including systems installed on residential rooftops. A solar company that owns a system on your roof can claim a 30% tax credit on its investment and pass a portion of that value to homeowners through lower pricing on leases, power purchase agreements (PPAs), or prepaid arrangements."

"Under IRS rules, a solar company must retain genuine ownership of the system for at least five years. It cannot simply transfer ownership on day one and pocket the credit. This has given rise to offers referred to as prepaid PPA and 'deferred ownership' products. You pay upfront and take full title to the system after the required holding period, which is typically six years."

The residential solar tax credit (Section 25D) that provided a 30% credit worth up to $9,000 expired on December 31, 2025, fundamentally changing solar economics for homeowners. The One Big Beautiful Bill accelerated this phase-out originally scheduled through 2034. However, the commercial Clean Electricity Investment Credit (Section 48E) remains available through at least 2027. Solar companies can leverage this credit by retaining system ownership for at least five years, then passing savings to homeowners through leases, power purchase agreements, or prepaid arrangements. New offerings like prepaid PPAs and deferred ownership products allow homeowners to pay upfront and gain full title after the holding period, typically six years. Meanwhile, solar panel technology continues advancing with prices reaching near-historic lows.

Read at Earth911