Solar Tax Credit Calculator 2026

This is the single most important fact about solar economics in 2026, and it is the one most calculators get wrong. Section 25D, the Residential Clean Energy Credit, returned 30% of an owned system's cost on your personal tax return. The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, ended it effective December 31, 2025. If you buy a system with cash or a solar loan and it is placed in service in 2026 or later, your federal solar tax credit is $0. There is no step-down rate to phase in later; the credit is gone.

What replaced it? Section 48E, the Clean Electricity Investment Credit, still pays 30%, but it is a business credit. It flows to the owner of the system, not to a homeowner on a primary residence. In practice that means lease and PPA customers benefit indirectly: the leasing company or developer claims 48E and prices it into lower monthly payments. And 48E did not die on July 4, 2026 for residential lease/PPA. Projects that began construction before that date are grandfathered into the standard four-year completion window, and construction that starts after July 4, 2026 still earns the full 30% as long as the system is placed in service before January 1, 2028. Only projects that slip to a 2028 or later placed-in-service date get $0. Beginning of construction is evidenced by the physical work test or the 5% safe harbor (the IRS's Notice 2025-42 safe harbor was vacated). Never accept a quote that shows a 30% federal credit on a cash or loan purchase installed in 2026 - that figure is wrong.

State credits are the main survivors, and they vary a lot. New York offers a flat $5,000 state tax credit (New York offers a state personal income tax credit of 25% of qualified solar electric system costs, up to $5,000.). Massachusetts offers $1,000 (Massachusetts offers a state personal income tax credit of 15% of net system cost, up to $1,000.). California, by contrast, has no state income tax credit at all - California does not offer a state tax credit for solar installations. - so a California cash purchase in 2026 stacks $0 federal and $0 state income-tax credit, and the savings case rests entirely on electricity rates, net metering, and property tax relief. Use the calculator above with your own state to see exactly what stacks.

Why does so much of the internet still show 30%? Most solar marketing material was written before OBBBA and never updated. Some companies conflate Section 25D with Section 48E on purpose to keep quotes looking attractive. The honest benchmark for a 2026 owned system is $0 federal credit; the honest benchmark for a lease/PPA placed in service in 2028 or later is also $0, because construction starting after July 4, 2026 must be completed before January 1, 2028. If a salesperson tells you otherwise, ask them to name the tax code section and who claims the credit. This tool is built to be the answer key.