Most articles ranking on Google right now still describe the old law. This page reflects the law as it stands in 2026.
What Ended (and When)
| Credit | What it covered | Status for 2026 installs |
|---|---|---|
| §25D Residential Clean Energy Credit (30%) | Owned solar, batteries (3 kWh+), geothermal heat pumps | Ended — $0 for systems placed in service after Dec 31, 2025 |
| §25C Energy Efficient Home Improvement Credit (30%, up to $2,000/yr for heat pumps) | Heat pumps, insulation, windows, panel upgrades | Ended — $0 for property placed in service after Dec 31, 2025 |
The law: One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025. The IRS confirmed in FS-2025-05: for solar, an expenditure counts when installation is completed. Paid in 2025 but installed January 2026? No credit.
If you installed in 2025: you can still claim on your 2025 return (Form 5695 for 25C; Form 5695 residential energy credits section for 25D). The credit is nonrefundable — limited to your tax liability.
What’s Still Alive in 2026
1. HEAR rebates — up to $8,000 (income-qualified)
The Home Electrification and Appliance Rebates program is appropriation-funded, not a tax credit — the OBBBA didn’t touch it. It’s a point-of-sale discount (taken off at purchase, not claimed at tax time) on heat pumps, heat pump water heaters, electrical panels, and more. Catch: income limits apply, and you must go through your state’s program and participating contractors — arrange it before installation, not after.
2. Leased / PPA solar — §48E pass-through (through ~2027)
The 30% commercial clean-electricity credit (§48E) survives. With a lease or power purchase agreement, the company owns the system, claims §48E, and passes savings to you as lower monthly payments. You get no tax credit personally — but the economics can beat buying outright in 2026.
3. State and utility incentives — fully intact
Untouched by the federal rollback, and in some states stronger than ever: state tax credits, per-watt utility rebates, sales-tax exemptions, and property-tax exemptions on added home value. Check the DSIRE database (dsireusa.org) for your ZIP code — this is now the single most important incentive step.
Red Flags in 2026 Quotes
- ❌ “Includes the 30% federal tax credit” on a 2026 purchase → outdated or dishonest. Ask them to remove it.
- ❌ “Sign now to lock in the credit” → the credit is gone; urgency is manufactured.
- ✅ Itemized quote showing equipment, labor, permits, and separately any rebates applied.
- ✅ Contractor mentions HEAR/state programs by name and explains eligibility.
Sources
IRS FS-2025-05 (OBBBA changes to §§25C, 25D, 25E, 30C, 30D); DOE HEAR program guidance; DSIRE. Updated November 2026.
Disclaimer: General information, not tax advice. Tax law is complex and individual — confirm with a tax professional before making decisions.