The federal solar tax credit has helped millions of Americans make the switch to clean, affordable solar energy. But a major change is coming soon: under recent legislation, the 30% Federal Solar Investment Tax Credit (ITC) will officially expire at the start of 2026. That means homeowners who wait too long could miss out on thousands in savings. Here’s what you need to know about the coming deadline, how it affects you, and what steps you can take now to lock in your credit before it disappears.
What Exactly Is the Federal Solar Investment Tax Credit?
The federal solar tax credit, also called the Investment Tax Credit (ITC), allows homeowners and businesses to deduct 30% of the total cost of installing solar energy systems from their federal taxes. That includes solar panels, inverters, balance-of-system equipment, and installation labor. Battery storage systems also qualify under the current rules, whether installed at the same time or added later.
Originally introduced in 2006, the ITC has been extended several times and has played a key role in driving the rapid growth of solar adoption in the United States. Over the years, the credit has provided stability and confidence for both homeowners and installers by reducing the financial barrier to entry. It not only helps offset the upfront cost of equipment and installation but also shortens the payback period and improves the overall return on investment. By lowering installation expenses and making renewable energy more attainable, the ITC has been one of the most influential policies in expanding access to solar power for households and businesses across the nation.
What’s Changing in 2026
In July 2025, new legislation changed the course of the federal solar tax credit, moving up its expiration date. As it currently stands, the 30% ITC for residential solar installations will end after December 31, 2025. To qualify, your solar system must be fully installed and operational before that date. Systems completed in 2026 or later will no longer be eligible for the credit unless Congress introduces new extensions.
This change was made as part of a broader energy policy update aimed at redirecting federal resources toward other renewable programs and emerging clean energy technologies such as wind, storage, and electric vehicle infrastructure. Lawmakers designed the shift to balance funding across different sectors, but it also means that residential solar is losing one of its most impactful federal incentives. For homeowners, this translates into a small window of opportunity to benefit from the full 30 percent tax credit. With installation timelines, permitting requirements, and supply chain factors to consider, the practical effect is clear: time is running short, and anyone considering solar should begin the process soon to ensure their system is completed before the cutoff date.
The Financial Impacts — How Much More You’ll Pay Without It
Losing the 30% ITC will significantly impact the cost of going solar. For a typical home solar system costing around $11,000 – $14,000, the tax credit reduces your federal tax bill by about $4,000 – $5,000. Without that credit, homeowners will have to pay the full system cost out of pocket, or finance the entire amount through loans.
Beyond the direct cost, there are indirect risks to waiting. As the deadline approaches, the solar market is expected to see a surge in demand, leading to potential installation delays, longer permitting times, and higher equipment costs. The longer you wait, the greater the chance of missing the deadline entirely.
What Homeowners Can Do Now
1. Start Planning Early
Solar projects take time. Between site assessments, system design, permitting, installation, and interconnection, a full project can take 8–12 weeks or longer. Starting early ensures you beat the rush and secure your eligibility.
2. Choose a Trusted Solar Installer
Work with a reputable installer with proven experience completing projects on schedule. At Evergreen Solar, we take pride in guiding homeowners through every stage of the process, from the first site assessment to final system activation. Our partner company, Harbert Roofing, holds all necessary licensing and works hand-in-hand with Evergreen Solar to complete every installation. Together, we bring a proven track record of on-time, high-quality projects. We handle permitting, scheduling, and quality assurance from start to finish, ensuring your system is installed correctly, safely, and efficiently so you qualify for the full credit before the deadline.
3. Review Financing Options
Whether you pay cash, finance through a solar loan, or use other financing programs, make sure your plan accounts for the timing of the tax credit. If financing, confirm how your lender handles the expected ITC amount.
4. Confirm Eligibility and Documentation
Keep copies of all purchase agreements, invoices, and proof of operation dates. You’ll need them for your tax filing to claim the credit. If you plan to add battery storage, ensure it meets the qualifying criteria.
5. Don’t Wait Until the Last Minute
Installers are already preparing for high demand leading into late 2025. Waiting until fall or winter could mean your project won’t be completed in time to qualify.
State and Utility Solar Programs You Can Still Use
Some states and utilities offer their own solar incentives, rebates, or net metering programs. While these can help reduce costs, they typically can’t match the scale of the 30% federal credit. Many state programs are limited, competitive, or subject to budget restrictions.
For example, California offers additional solar incentives, but even these may not offset the loss of the federal benefit entirely. Homeowners should check with their state energy office or local utility to explore available options—but plan under the assumption that the federal credit will no longer be available after 2025.
Note: For more details on the California Tax Credit Program.
What’s Next for Home Solar After the Credit Expires
Even after the ITC expires, solar energy will remain a valuable long-term investment. Rising electricity rates and improvements in panel efficiency continue to make solar financially viable, even without federal support. However, the loss of the tax credit will increase upfront costs and lengthen payback periods.
There’s also a possibility that new legislation could introduce future incentives or credits for renewable energy. But as of now, nothing is guaranteed—making the next year the best window to act.
Take Advantage of the Solar Credit Before It’s Too Late
The 2026 expiration of the federal solar tax credit marks the end of a major era of renewable energy incentives. Homeowners who act now can still lock in thousands of dollars in savings, while those who wait risk paying much more later. If you’ve been on the fence about going solar, now is the time to make your move. Schedule a consultation, secure your installation date, and take advantage of the 30% federal credit while it lasts.
