Is Solar Worth It in 2026 Without the Federal Tax Credit?
Federal tax credit status: The federal residential clean energy credit (25D) doesn't apply to expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is completed. Systems whose installation is completed in 2026 do not qualify for it.
That changes the math for buyers, but whether solar makes sense for your home was always a household-specific question. No one can promise you savings.
The factors that decide it
Per the U.S. Department of Energy, savings depend on how much electricity you use, system size, whether you buy or lease, how much sun your roof gets, your utility's rates, and how your utility compensates exported power. The FTC adds that you'll still pay your utility's fixed charges.
A practical self-check
- Add up your last 12 months of kWh and note fixed charges (FTC).
- Look up your rates — DOE points to the National Utility Rate Database.
- Find your utility's export policy (see our net metering guide).
- Estimate production with NREL's PVWatts calculator, then compare to an installer's estimate.
- Check remaining incentives in DSIRE.
- Consider how long you'll stay — FTC notes systems are designed to stay on a home at least 20 years.
- Price sanity check: LBNL's 2024 median for cash-purchased residential systems was $3.5/W before incentives (Oct 2025 report). Without the federal credit, you bear more of that cost.
Be skeptical of rate projections
The FTC warns that proposals often assume future utility rate increases and that "it's hard to predict future utility rates." Ask how a projection changes if rates stay flat.
Leases and PPAs
Leases and PPAs never gave the homeowner the 25D credit (the owner claims incentives, per FTC). Read the contract terms carefully — see our leasing vs. buying guide.
Sources
- IRS, "FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)" — https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb (accessed Oct 20, 2026)
- U.S. Department of Energy, "Homeowner's Guide to Solar" — https://www.energy.gov/eere/solar/homeowners-guide-going-solar (accessed Oct 20, 2026)
- FTC Consumer Advice, "Solar Power for Your Home" — https://consumer.ftc.gov/articles/solar-power-your-home (accessed Oct 20, 2026)
- Barbose et al., Lawrence Berkeley National Laboratory, "U.S. Distributed Solar and Storage: 2025 Data Update" (October 2025) — https://emp.lbl.gov/sites/default/files/2025-10/Distributed%20Solar%20%26%20Storage-2025%20Data%20Update.pdf (accessed Oct 20, 2026); data viewer: https://emp.lbl.gov/tracking-the-sun
- DSIRE (N.C. Clean Energy Technology Center, NC State University) — https://www.dsireusa.org/ (accessed Oct 20, 2026)
SolarMatchup is a free service: you submit one request and we match you with one installer. Their proposal is an estimate, not a guarantee — use this guide to read it carefully and ask questions before you sign. Savings, if any, depend on your usage, utility rates, and local rules.
Last reviewed 2026-10-20.
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