Is Your Solar Quote Still Showing a 30% Tax Credit?Here's the Truth for 2026
If a solar company is showing you a 30% federal tax credit on your 2026 quote, they are either lying or haven't updated their math. Section 25D expired December 31, 2025. Cash and loan buyers get $0 in federal credits. Here is what your quote should actually look like.
The Bottom Line
The federal residential solar tax credit (Section 25D) is gone. It expired December 31, 2025 when the OBBBA repealed the Inflation Reduction Act's residential energy provisions. If your 2026 solar quote shows a 30% ITC line item reducing your cost by $7,000-$10,000, that number is wrong. You will owe the full system price minus state-level incentives only. The one exception: third-party-owned systems (leases/PPAs) can still access Section 48/48E credits — but the financing company claims that credit, not you.
What Actually Happened to the Federal Solar Tax Credit
The story starts with good intentions. In 2022, the Inflation Reduction Act extended the 30% residential solar investment tax credit (Section 25D) through 2032. Homeowners who bought solar panels with cash or a loan could claim 30% of the total cost as a dollar-for-dollar federal income tax credit.
Then came the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. Among its sweeping changes, the OBBBA repealed the IRA's residential clean energy provisions. Section 25D — the homeowner solar tax credit — expired on December 31, 2025.
Timeline of the Federal Solar Tax Credit
This is not a gray area. It is not "pending legislation" or "expected to be reinstated." The law is clear: homeowners who purchase solar in 2026 with cash or a loan get zero federal tax credit. Any installer who says otherwise is either uninformed or deliberately misleading you.
This Affects Every State
Section 25D was a federal credit. Its expiration applies equally to Massachusetts, New Hampshire, Connecticut, New Jersey, Texas, and every other state. Some states have their own incentives that partially fill the gap, but no state can restore a federal tax credit.
The $9,900 Math Error on Your Quote
Here is what a dishonest or outdated quote looks like next to an accurate one. We are using a typical Massachusetts 11 kW system at $3.00/W as the example.
| Line Item | Outdated Quote | Honest 2026 Quote |
|---|---|---|
| System cost (11 kW) | $33,000 | $33,000 |
| 30% federal ITC (Sec 25D) | -$9,900 | $0 (expired) |
| MA $1,000 state credit | -$1,000 | -$1,000 |
| Net cost before SMART | $22,100 | $32,000 |
| SMART 3.0 (20-yr value) | Not shown | -$5,760 |
| True net cost | $22,100 | $26,240 |
Assumes 11 kW system at $3.00/W. SMART 3.0 value = $0.03/kWh × 9,600 kWh/yr × 20 years = $5,760. MA $1,000 state income tax credit. No federal credit (Section 25D expired).
The gap: $9,900 you thought you were saving
A quote showing $22,100 after a phantom 30% ITC is $9,900 wrong. That is not a rounding error. That is nearly a third of the system cost. If you sign a contract based on that number and discover the truth when you file your taxes, you have no recourse — the installer got paid, the panels are on your roof, and the IRS will not honor a credit that does not exist.
New Hampshire: Even Worse Without State Incentives
NH repealed its state solar rebate (SB 303, 2024) and has no equivalent to Massachusetts's SMART program. An NH homeowner getting a quote with a phantom 30% ITC is looking at a gap even larger than $9,900 — because there are fewer state programs to offset the true cost. Realistic NH solar cost: $3.03/W × 10 kW = $30,300, with payback around 9.5-11 years.
The One Exception: Section 48/48E (Lease or PPA)
There is one way solar can still involve a 30% federal credit in 2026 — but it does not work the way most quotes describe it.
How Section 48/48E Works
- A third-party company (not you) owns the solar system and installs it on your roof.
- That company claims the 30% ITC under Section 48/48E as a business tax credit.
- You get the benefit indirectly through lower monthly lease/PPA payments. The company passes some of its tax savings to you through reduced rates.
- Deadline: The project must begin construction before July 4, 2026. After that, even this pathway closes.
This is why solar leases and PPAs have become more attractive in 2026 compared to cash purchases — the economics shifted dramatically when the homeowner credit disappeared. The financing company can still monetize the federal credit and pass the savings through to you.
NuWatt's Propel Program
NuWatt's Propel financing program uses this exact structure. A third-party owner claims the Section 48/48E credit, and homeowners get solar with zero money down and rates significantly below their current utility bill. Available in select states for projects beginning construction before the July 4, 2026 deadline.
Learn why lease/PPA wins in 2026Key Distinction
If your quote shows a 30% tax credit and lists you as the system owner paying cash or taking a loan, it is wrong — period. The 48/48E credit only applies when a third-party financing company owns the system. The credit goes to them, not to your tax return.
How to Spot an Outdated Solar Quote: 5 Red Flags
Before you sign anything, check your quote for these warning signs. Any single one should trigger a serious conversation with your installer. Two or more? Get a second opinion.
Shows "30% federal tax credit" or "ITC" as a line item
Section 25D expired December 31, 2025. Any quote dated 2026 that shows a 30% homeowner tax credit is factually wrong. The only exception is Section 48/48E, which applies to third-party-owned systems (leases/PPAs) — not to cash or loan purchases.
References "Inflation Reduction Act" credits for homeowners
The IRA did extend the residential ITC through 2034 — but the OBBBA (signed July 4, 2025) repealed that extension. Any quote citing the IRA for homeowner credits is using outdated information.
Shows payback period under 6 years in MA without battery DR
Without the federal credit, realistic MA payback is 7.5-8.5 years with SMART and net metering. A quote showing 4-5 year payback is almost certainly baking in a tax credit that no longer exists.
Doesn't mention SMART program or ConnectedSolutions
SMART 3.0 and ConnectedSolutions are Massachusetts's most valuable solar incentives in 2026. If a quote ignores them, the installer may not be familiar with current state programs — or may be padding the federal line to compensate.
Uses 2024 or 2025 pricing data or incentive tables
Equipment prices, labor costs, and incentive rates change year to year. A quote using last year's data — especially pre-OBBBA data — could be off by $5,000-$10,000 on net cost.
What to Do If You Spot These Red Flags
- 1. Ask the installer directly: "Is this quote based on a federal tax credit? Which section of the tax code?"
- 2. If they say Section 25D, tell them it expired December 31, 2025, and ask for a corrected quote.
- 3. Get at least 2-3 quotes from different installers. Compare the net cost numbers — a $9,000 discrepancy will be obvious.
- 4. Check with your CPA or tax advisor before signing — they can confirm what credits you are (and are not) eligible for.
- 5. Report deceptive quotes to your state's Attorney General consumer protection division.
What MA and NH Solar Actually Costs in 2026 — Honest Numbers
Here are the real numbers. No phantom tax credits, no inflated savings projections — just what you will actually pay and what you will actually save.
Massachusetts
System cost (11 kW)
$33,000 - $37,400
$3.00-$3.40/W before incentives
Real payback period
7.5 - 8.5 years
With SMART 3.0, net metering, state credit
Available MA Incentives (2026)
- SMART 3.0: $0.03/kWh for 20 years = ~$5,760 over system lifetime
- Net metering: Full retail credit for excess generation
- ConnectedSolutions: $275/kW summer + $50 winter (battery required)
- State tax credit: $1,000 on MA income tax
- Sales tax exemption: 100% on equipment and installation
- Property tax exemption: 20 years on added home value
New Hampshire
System cost (10 kW)
$30,300
$3.03/W average, no state rebate
Real payback period
9.5 - 11 years
Net metering + property tax exemption only
Available NH Incentives (2026)
- Net metering (NEM 2.0): ~85% of retail rate, locked through 2041
- Property tax exemption: RSA 72:62, available in ~66% of NH towns
- Community Power: Competitive supply rates through CPCNH aggregation
- State rebate: Repealed by SB 303 (2024). No state-level cash incentive.
- No SMART equivalent: NH has no performance-based incentive program.
Why Solar Is Still Worth It Without the Federal Credit
The loss of the federal credit is significant — but it does not kill the solar business case. Here is why solar still makes financial sense in the Northeast in 2026.
$0.28-$0.32
MA electricity rate per kWh
Up 18% since 2023. Rising 3-5% annually.
$100,000+
25-year electricity savings
Typical 11 kW system in MA, assuming 3% annual rate increases.
4-5%
Home value premium
Solar adds $20,000-$30,000 to resale value in MA.
25+ years
Panel warranty lifespan
Modern panels degrade less than 0.4%/year. Still producing at 90%+ after 25 years.
The math is straightforward: an 11 kW system in Massachusetts costs $33,000 before incentives and pays back in under 9 years. The remaining 16+ years of production are essentially free electricity. Even without the federal credit, your return on investment exceeds what you would get from a savings account, CD, or most stock market investments over the same period.
State programs fill much of the gap the federal credit left behind. MA's combination of SMART 3.0, net metering, ConnectedSolutions, and tax exemptions provides $15,000-$25,000 in lifetime value. Solar is still profitable — it just requires honest math to show it.
How to Protect Yourself When Shopping for Solar
Demand a line-by-line cost breakdown
Every quote should show gross system cost, each incentive as a separate line, and the resulting net cost. If a quote shows one lump "after incentives" number, ask for the detail.
Verify each incentive is currently active
For MA: SMART 3.0 (active), net metering (active), ConnectedSolutions (active), $1,000 state credit (active), tax exemptions (active). Federal ITC: EXPIRED. Ask the installer to cite the specific program for each line item.
Get 3 quotes minimum
Comparing multiple quotes is the fastest way to spot outliers. If one installer shows a net cost $9,000 lower than the others, that is your red flag.
Ask about ownership structure
If you want to buy with cash or a loan, confirm no federal credit applies. If a lease/PPA is offered, understand that the financing company — not you — claims any Section 48/48E credit.
Check the contract for ITC language
Before signing, search the contract for "investment tax credit," "ITC," "Section 25D," or "30% credit." If any of these appear in a cash/loan purchase agreement, do not sign until corrected.
Consult your CPA or tax advisor
A 15-minute call with your accountant can confirm exactly what tax credits you are eligible for. This is the single best protection against a misleading quote.
Frequently Asked Questions
Is the 30% federal solar tax credit still available in 2026?
No. The residential solar investment tax credit (Section 25D) expired on December 31, 2025. It was repealed by the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. Homeowners who purchase solar with cash or a loan in 2026 receive $0 in federal tax credits. The only path to a federal credit is through a third-party-owned system (lease or PPA) under Section 48/48E, where the system owner — not the homeowner — claims the credit.
What happened to the Inflation Reduction Act solar credits?
The Inflation Reduction Act (2022) originally extended the 30% residential solar ITC through 2032. However, the OBBBA repealed the residential provisions effective December 31, 2025. The commercial ITC (Section 48/48E) remains available for projects beginning construction before July 4, 2026, but this only applies to business/third-party system owners, not individual homeowners.
Can I still get a solar tax credit if I lease or do a PPA?
The system owner (the financing company) can claim the 30% ITC under Section 48/48E for projects beginning construction before July 4, 2026. As the homeowner, you do not directly receive a tax credit. However, the financing company factors this credit into your lease or PPA rate, which is why lease/PPA rates are significantly lower than they would be otherwise. NuWatt's Propel program is one example of this structure.
Is it illegal for a solar installer to show the ITC on a 2026 quote?
It is not automatically illegal, but it is deceptive and potentially violates consumer protection laws. In Massachusetts, the AG's office enforces Chapter 93A, which prohibits unfair or deceptive acts in commerce. If an installer knowingly shows an expired tax credit to close a sale, that could constitute a violation. At minimum, it is a serious red flag about the installer's competence or ethics.
What solar incentives are actually available in Massachusetts in 2026?
Massachusetts still has strong incentives: the SMART 3.0 program pays $0.03/kWh for 20 years (worth $5,760 on a typical system), net metering credits offset your electric bill, ConnectedSolutions pays $275/kW for battery dispatch, the $1,000 state income tax credit, 100% sales tax exemption on equipment, and a 20-year property tax exemption on added home value. Combined, these can offset $15,000-$25,000 over the system lifetime.
What solar incentives are available in New Hampshire in 2026?
New Hampshire has fewer incentives than Massachusetts. The state rebate was repealed by SB 303 in 2024. Remaining incentives include net metering at approximately 85% of retail rate (locked through 2041), a local-option property tax exemption under RSA 72:62 in about 66% of towns, and Community Power aggregation programs offering competitive supply rates. There is no equivalent to MA's SMART program.
Is solar still worth it without the federal tax credit?
Yes, especially in the Northeast. Massachusetts electricity rates average $0.28-$0.32/kWh and are rising 3-5% annually. A typical 11 kW system saves $2,800-$3,500 per year in electricity costs. Over 25 years, total savings exceed $100,000 even without the federal credit. Payback period in MA is 7.5-8.5 years; the remaining 17+ years are pure profit. Solar panels also add 4-5% to home value.
Get an Honest Solar Quote — No Phantom Tax Credits
NuWatt shows you the real numbers. Every incentive verified, every line item explained. See what solar actually costs for your home in 2026.
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