How to Ask Your Solar Installer About 48E Tax Credit Passthrough
Solar lessors have no obligation to pass through the 30% Section 48E investment tax credit — and most homeowners don't know to ask. Here's how to find out whether the credit is working for you or just for the installer.
What Is the 48E Credit?
Section 48E (the Clean Electricity Investment Credit) offers a 30% federal tax credit on qualifying solar installations. It is the credit that survived the OBBBA changes that sunset the older residential Section 25D credit at the end of 2025.
Unlike Section 25D (which a homeowner claimed directly on their personal return), 48E is claimed by the system owner. For a leased or PPA system, the system owner is the installer or leasing company, not the homeowner. They own the equipment on your roof, so they capture the credit.
This creates a transparency gap. The lessor pockets the credit, and there is no legal requirement to pass any of it through to the homeowner. Whether you benefit at all depends entirely on the installer's pricing decisions — and on whether you know to ask.
Why Passthrough Matters
On a $30,000 system, the 30% credit is worth $9,000. Whether the installer passes that through can swing your net cost by thousands of dollars over the life of the agreement.
The catch is that not all installers pass it through equally. Some compete aggressively on price and fold nearly the entire credit into your quote. Others keep most or all of it as margin, offering you a "discount" that is far smaller than the credit they're capturing — or no discount at all.
Because the credit is embedded in your financing terms rather than handed to you as a line item, you can't tell who's passing it through just by looking at a monthly payment. You have to ask. The rest of this guide shows you exactly what to look for and the one question that exposes the difference.
The 3 Passthrough Patterns
Installer pricing falls into three recognizable patterns. Each one describes how much of the 30% credit actually reaches your system price.
Aggressive Passthrough
25–40% below retail- What it means:
- The installer passes through most or all of the 30% credit. You see a system price significantly below typical retail.
- Who does this:
- Competitive lessors and some regional installers using the credit to win market share.
- Verdict:
- Best deal for the homeowner. You capture nearly the full value of the credit.
Partial Passthrough
10–20% below retail- What it means:
- The installer passes through a portion of the credit and keeps the rest as margin.
- Who does this:
- Many national leasing companies. They advertise a "discount" that sounds good but is less than the full credit value.
- Verdict:
- Acceptable but not optimal. You're leaving money on the table. Negotiate.
No Passthrough
At or above retail- What it means:
- The installer keeps the ENTIRE 30% credit. Your lease/PPA price is the same as (or higher than) a cash purchase with no credit applied.
- Who does this:
- Installers banking on the fact that homeowners don't know to ask. Sometimes the "low monthly payment" obscures that you're paying full freight.
- Verdict:
- Red flag. Walk away or demand the credit be reflected in your price.
The One Question to Ask
“How much of the 30% federal tax credit are you passing through to me in my system price?”
How to read their answer:
- If they can't answer or dodge, suspect No Passthrough.
- If they say “we've already priced it in,” ask for the before-credit vs after-credit price in writing. A real passthrough is documentable.
- Get the passthrough amount or discount in the contract, not just verbally. If it isn't on paper, it isn't real.
Red Flags Checklist
Any of these should make you pause and dig deeper before signing:
- Installer won't put the credit value or passthrough in writing.
- Monthly payment comparison is the only number shown — no total system cost.
- "You don't qualify for the tax credit" said to a homeowner who could claim 25D directly (cash/loan buyers CAN claim it themselves).
- Price is identical whether you buy or lease — means the lease isn't passing through 48E.
- Salesperson can't explain the difference between Section 25D and Section 48E.
Section 25D vs 48E — Quick Comparison
| Section 25D (Residential) | Section 48E (Clean Electricity) | |
|---|---|---|
| Who claims it | The homeowner | The system owner (often the lessor) |
| Applies to | Cash & loan purchases | Leases, PPAs, and some commercial |
| Credit value | 30% | 30% |
| Homeowner guarantee | You get the full credit | Only if the lessor passes it through |
The credit value is identical at 30% — the difference is entirely about who controls it. With 25D you held the credit; with 48E the lessor does, and your access depends on their pricing.
Related Resources
PPA Contract Decoder
Decode the fine print in a Power Purchase Agreement — escalator clauses, buyout terms, and where the credit value is (or isn't) reflected.
OBBBA Tax Credit Deadline Tracker
Track the Section 25D sunset and 48E phase-out timelines so you know which credits are still alive when you sign.
Section 48E Pass-Through Mechanics
The technical deep dive on how the commercial Section 48E credit reaches homeowners through leases and PPAs.
Why trust this guide
EnergyTools is independent and takes no installer-paid placement. The 48E passthrough patterns here reflect how third-party-owned solar pricing is actually structured in 2026. The 30% credit only reaches you if your installer chooses to pass it through — the purpose of this guide is to make that choice visible. Last updated: June 2026.