The 30% federal residential solar tax credit ended for new qualifying installations after December 31, 2025. Homeowners who completed an eligible solar or battery installation before the deadline may still be able to claim the credit or use an unused credit from a previous year.
Learn what changed, who may still qualify, and which solar incentives California homeowners can explore in 2026.
The federal Residential Clean Energy Credit, also known as Section 25D, previously allowed eligible homeowners to claim 30% of qualifying solar installation costs against their federal income taxes.
The credit applied to qualifying residential solar installations completed from 2022 through December 31, 2025. Under the updated federal law, new residential solar installations completed in 2026 are not eligible for this credit.
Homeowners who completed qualifying installations in 2025 may still have filing or carryforward options. Eligibility depends on individual circumstances, so consult a qualified tax professional before claiming the credit.
If your qualifying solar installation was completed by December 31, 2025, you may be able to claim the federal residential clean energy credit on your 2025 tax return.
The credit was nonrefundable, meaning it could reduce eligible federal income-tax liability but could not exceed that liability. Any unused qualifying credit may be carried forward under the applicable rules.
Homeowners generally use IRS Form 5695 to calculate and claim the credit. A tax professional can help determine eligibility and whether filing or amending a return is appropriate.
The federal tax credit was one way to reduce installation costs, but it was not the only financial consideration for California homeowners.
No. New residential solar installations completed after December 31, 2025, do not qualify for the former 30% Residential Clean Energy Credit under Section 25D.
Potentially, yes. If your installation met the eligibility requirements and was completed by December 31, 2025, you may be able to claim the credit on your 2025 federal tax return, even when filing that return in 2026.
New residential battery installations completed in 2026 do not qualify for the former Section 25D credit. Qualifying battery storage installed from 2023 through December 31, 2025, may have been eligible if it met the IRS requirements, including a storage capacity of at least 3 kWh.
Yes. An unused credit from a qualifying prior-year residential clean energy installation may be carried forward to reduce eligible federal income-tax liability in a later year.
No, not under the former Section 25D credit. The IRS explains that completing the original installation after December 31, 2025, makes the expenditure ineligible, even if payment occurred before the deadline.
Certain California incentives remain available for qualifying customers and installations. These include eligible SGIP solar-and-storage incentives and California’s solar property-tax new-construction exclusion. Requirements, funding and deadlines vary.
Request a customized solar estimate based on your electricity bills, roof, energy usage and desired equipment. GT Power can help you review installation options and estimated costs so you can make an informed decision.
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