Home Energy Tax Credits in 2026: What Ended, What Survives

§25D — the 30% solar and battery credit

The Residential Clean Energy Credit gave homeowners 30% of the cost of solar panels, solar water heating, battery storage of at least 3 kWh, geothermal heat pumps, small wind, and fuel cells — uncapped, and nonrefundable with a carryforward. The Inflation Reduction Act had extended it through 2032 before stepping down. That schedule no longer exists.

Three details worth being precise about. First, there is no reduced 2026 rate — not 26%, not 22%, not anything. Sales material still advertising “30% back” on a 2026 install is wrong, and that is a useful red flag when comparing quotes.

Second, the statutory test is when the expenditure was made, not when the system was placed in service. Congress deliberately changed the wording. The IRS treats an expenditure as made when the original installation is completed, so a system finished in 2025 is generally the qualifying case even if some paperwork trailed into 2026. Worth knowing because the IRS's own consumer-facing page currently describes this as a placed-in-service test, which does not match the statute — if this matters to your return, work from the U.S. Code and the OBBBA FAQ, and take it to a tax professional.

Third, a leased or PPA system never qualified for §25D at all, because the credit required you to own the equipment. The termination therefore hit buyers, not lease customers — see the section below on why that matters more than it sounds.

§25C — the efficiency credit for HVAC, insulation, windows and doors

The Energy Efficient Home Improvement Credit covered 30% of qualifying efficiency work against annual caps: broadly $1,200 a year for insulation, air sealing, windows, doors and efficient furnaces or air conditioners, plus a separate $2,000 track for heat pumps, heat pump water heaters, and biomass stoves. Because the cap reset each year, it rewarded spreading work across tax years. That planning strategy is now moot.

The practical effect is smaller than it looks for most projects. A $1,200 credit on a $9,000 HVAC replacement was about 13% — meaningful, but not usually the deciding factor. A heat pump that made sense on operating cost still makes sense; it just pays back somewhat slower. The bigger loss is for households who were stacking the $2,000 heat pump credit with a full weatherization package.

§30C — the EV charger credit, still alive until June 30

The Alternative Fuel Vehicle Refueling Property Credit is the one residential energy credit that survived into 2026 — and it terminates on 2026-06-30. For a home installation it is worth 30% of cost up to $1,000 per item of property.

The catch that trips people up: §30C has a location requirement. The property must sit in an eligible census tract — broadly, non-urban or low-income tracts — and a large share of suburban addresses do not qualify. Check your specific address against the IRS/DOE eligibility mapper before counting on it.

Why solar leases and PPAs survived when buying didn't

This is the least-understood part of the change, and it has a real effect on what you will be offered in 2026. Homeowners who buy lost §25D outright. But a third party who owns panels on your roof claims a different credit — the commercial §48E investment credit — and §48E was not terminated.

The 2025 legislation did add a lease restriction to §48E, which is where the confusion comes from. But read closely, that restriction reaches only solar water heating property and small wind. It does not reach qualified solar electric property — ordinary rooftop PV. So the lease and PPA channel for rooftop solar remains open.

The practical consequence: expect solar sales in 2026 to push hard toward leases and PPAs, because that is where a federal incentive still exists. That does not make them a bad deal — but it does mean the pitch is being shaped by the seller's tax position, not yours. Compare the lifetime cost of both, and read the escalator clause. Our 2026 payback calculator runs all four ownership models →

What this actually changes about your decision

The most common mistake right now is treating the credit's disappearance as a verdict on the technology. It is not. Losing a credit does not change how much energy an upgrade saves — it changes how deep the upfront hole is that those savings have to climb out of.

• Solar: payback typically lengthens by roughly three to five years. Whether it still works now depends almost entirely on your retail electricity rate and whether your utility credits exports at full retail. Run your own numbers →
• Heat pumps and HVAC: largely unchanged if you were replacing failed equipment anyway. The credit was a discount on a purchase you had to make, not the reason to make it.
• Insulation and air sealing: still the highest-return efficiency work available, credit or no credit. Payback is usually measured in a few years on utility savings alone.
• Windows: were never a good energy investment on payback grounds — the old $600 cap barely moved a $15,000 project. Replace them for comfort, noise, or rot, not for the energy math.

What is still available in 2026

• State tax credits — for example New York at 25% capped at $5,000 for solar, and South Carolina at 25%. Many states offer nothing.
• Utility rebates — usually first-come, first-served against an annual budget, so confirm funds remain before you commit.
• HOMES and HEAR rebates — state-administered whole-home and electrification rebate programs, income-scaled, and often worth more than the old federal credit for eligible households.
• SREC markets — New Jersey, Maryland, Massachusetts, DC, Pennsylvania, Ohio and Illinois. Ongoing income rather than an upfront discount.
• Net metering or net billing — the value of exported solar, and now one of the largest single variables in whether solar pays.
• Property and sales tax exemptions — many states exclude the added home value from assessment, or waive sales tax on equipment.

The standard free reference for all of these is DSIRE, maintained by NC State University and searchable by ZIP code. Programs open and close frequently, so check it rather than trusting a contractor's summary.

Where these numbers come from

Every credit status on this page — rate, cap, and termination date — is stored in a single dated configuration file that the calculators across this site read from, so a cost estimate can never drift out of sync with this page. Primary sources:

• 26 U.S.C. §25D(h) — termination text
• 26 U.S.C. §25C — termination and caps
• IRS — Alternative Fuel Vehicle Refueling Property Credit for Individuals
• 26 U.S.C. §48E — Clean Electricity Investment Credit
• One Big Beautiful Bill Act (P.L. 119-21) — congress.gov

This page is educational and is not tax advice. Tax outcomes depend on facts specific to you, including your liability, filing status, and the exact timing of your expenditure. Consult a licensed tax professional before relying on any of it.

Related tools and guides

• 2026 Solar Payback Calculator — post-credit economics, cash vs. loan vs. lease vs. PPA
• Federal Solar Tax Credit Calculator — check a 2022–2025 install or a business §48E system
• SALT Deduction Calculator — the 2026 tax change that helps homeowners
• HVAC Installation Cost Calculator
• Attic Insulation Cost Calculator
• Window Replacement Cost Calculator
• All HVAC & utilities calculators