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NuWatt designs, installs, and manages solar, battery, heat pump, and EV charger systems across 9 states. One company, one warranty, one point of contact.
Get a Free QuoteSection 25D expired December 31, 2025. The question every homeowner is asking in 2026 is the same: without the 30 percent residential tax credit, what is the smartest way to pay for solar? This is the neutral, four-path decision guide — written by a solar engineer, not a salesperson.
Cash
Day-1 ownership
Loan
Own + financed
Lease
Lowest monthly
Propel
Both, ME & TX
Quick Answer
After Section 25D expired December 31, 2025, residential cash buyers and traditional loan buyers no longer get the 30 percent federal credit on their personal returns. The only way an up-to-30% federal credit (with stackable adders that may verify post-installation) still reaches a homeowner roof in 2026 is through a TPO-owned program like Propel, which claims Section 48E commercial ITC. The headline customer promise stays at up to 30%; final realized rate depends on FEOC and energy-community verification. Four paths exist: cash (simplest, full ownership), traditional loan (ownership + financed, no federal credit), lease/PPA (lowest monthly, no ownership), and Propel (lowest monthly + ownership at year 5, ME and TX only). Pick the one that matches your cash, FICO, state, and ownership goal.
The federal solar tax landscape was rewritten in 2025 by the One Big Beautiful Bill Act. For nearly two decades, residential solar economics rested on the 30 percent Section 25D credit that flowed directly to the homeowner who paid for the system. That era is over. The good news is that the framework for commercial-scale credits is intact through the construction-begin window of July 4, 2026 — so the right structure can still pursue an up-to-30% Section 48E base on a residential roof, with stackable adders that may verify post-installation when FEOC and energy-community conditions are met.
25D
Residential clean energy credit. Sunset Dec 31, 2025. No replacement on the table.
25C
Energy efficient home improvement credit. Heat pumps, insulation, panels — all sunset Dec 31, 2025.
48 / 48E
Commercial ITC. 30 to 50 percent. Construction must begin by July 4, 2026 to lock in current bonus tiers.
6417
Direct pay for tax-exempt entities. Nonprofits and municipalities receive ITC as cash, not credit.
The 30 to 50 percent federal credit is still available — but only to commercial entities under Section 48 and 48E. The only way that credit reaches a homeowner roof in 2026 is if a commercial entity owns the system on your roof and passes the savings to you. That is what TPO programs (lease, PPA, and Propel) do.
That sentence is the key to understanding every path in this guide. Cash and traditional loan buyers structurally cannot access the 30 to 50 percent credit in 2026 because they own the system as individuals and Section 25D no longer exists. Lease, PPA, and Propel keep ownership in a commercial entity (at least temporarily, in the case of Propel) so the credit can be claimed and passed through to the homeowner.
Every residential solar transaction in 2026 falls into one of four buckets. Below is a structured comparison across the seven attributes that actually matter when you choose: who claims credits, term, ownership timing, FICO floor, prepayment flexibility, transferability at sale, and payment shape.
Path 1
Best for: You have $25-40K liquid you would not otherwise invest, and you value simplicity.
Payment Shape
One payment up front, zero monthly bill
Who Claims Credits
No federal credit available in 2026 (25D expired). State incentives still flow to you.
Term
No term — you own day one
Ownership Timing
Day 1
FICO Floor
N/A
Prepayment
N/A
Transferability at Home Sale
Sells with the home (Zillow ~4.1% premium)
Path 2
Best for: You want full ownership immediately, prefer monthly payments, and have a strong FICO.
Payment Shape
Fixed monthly for 12-25 years
Who Claims Credits
No federal credit available in 2026. HELOC interest may be deductible if used for substantial home improvement (consult tax pro).
Term
10-25 years typical
Ownership Timing
Day 1 (you own; lender holds lien)
FICO Floor
660-680 (varies by lender)
Prepayment
Usually allowed; some loans charge a fee
Transferability at Home Sale
Loan stays with you; system stays with the home
Path 3
Best for: You want lowest possible monthly with $0 down and no ownership goal.
Payment Shape
Fixed monthly (lease) or per-kWh (PPA), often with 1.9-2.9% annual escalator
Who Claims Credits
TPO claims Section 48E (up to 30% base, with stackable adders that may verify post-installation); homeowner sees the benefit as a lower monthly rate.
Term
20-25 years typical
Ownership Timing
TPO owns for the full term
FICO Floor
640-660 (lower than loans)
Prepayment
Buyout option at year 5, 7, or 10 (varies)
Transferability at Home Sale
Transfers to home buyer or buyout required at sale
Path 4
Best for: You want the lowest monthly AND ownership, and you are in Maine or Texas.
Payment Shape
Fixed monthly (~$0.00908 per dollar financed at 9.69%, effective May 25, 2026); re-amortizes after ITC capture
Who Claims Credits
TPO claims Section 48E (up to 30% base, with stackable adders that may verify post-installation); ITC reduction applied as principal credit so your loan amount drops.
Term
25 years (loan) + EBO at year 5
Ownership Timing
You own at year 5 via EBO
FICO Floor
660 (Tier 4)
Prepayment
EBO at year 5; full prepay allowed any time
Transferability at Home Sale
Transfers with home or pay off and transfer system
Below is a directional 25-year projection for a homeowner currently paying $200/month to the utility, assuming a 4 percent annual utility rate escalation, a 10 kW system priced at $30,000 gross, MA or TX installation, and 4 percent annual escalation on lease payments. Numbers are rounded for legibility — your actual quote will differ based on FICO, exact roof size, and state-specific incentives.
| Path | Upfront | Monthly (Year 1) | 25-Year Total Paid | Net vs Status Quo Bill |
|---|---|---|---|---|
| Cash Purchase | $30,000 | $0 | $30,000 paid + $0 to utility | ~$33K savings vs current utility bill |
| Traditional Loan (15yr, 8.5%) | $0-2K | ~$295/mo for 180 mo | ~$53,100 paid total | ~$10K savings vs utility |
| Lease / PPA (25yr, 2.5% esc) | $0 | ~$170/mo year 1 | ~$58,000 paid total | ~$5K savings + no ownership |
| Propel (up-to-40% ITC scenario, 9.19%) | $0 | ~$152/mo year 1, drops after ITC capture | ~$44,400 paid total | ~$18K savings + own at year 5 |
Assumptions: $30,000 gross system; 25D unavailable; Section 48E ITC = 40 percent for Propel and lease/PPA (FEOC adder applies to Silfab on Propel, similar structure on most modern leases); utility escalation 4 percent annually; Propel APR 9.19 percent (Tier 2, FICO 700-739, effective May 25, 2026); lease year-1 rate $170/mo with 2.5 percent escalator; loan APR 8.5 percent over 15 years. Status-quo bill assumes $200/month growing 4 percent annually (cumulative 25-year utility cost ~$83,000).
Five questions, five recommendations. Find the row that matches your situation; the right path is on the right. If multiple rows describe you, the order below reflects priority — start at the top and stop at the first match.
If your profile is...
Have the cash, want simple ownership
You write one check, you own it day one, you keep all electricity savings, and your home value goes up. The 25D loss hurts (about $9,000 on a 10 kW system), but if you would not have invested the $30K, the math is still strong over 20-25 years.
If your profile is...
Want full ownership, financed, FICO 740+
A 15- to 20-year solar loan from a credit union or specialty lender (or a HELOC if your home equity is strong) gives you immediate ownership, fixed payments, and the option to prepay. No federal credit in 2026, but you stay in full control.
If your profile is...
Lowest monthly, no ownership goal
A 25-year lease or PPA with a reputable TPO operator gives the lowest possible $0-down monthly. The TPO captures Section 48E and passes most of that savings into your rate. You will not own the system, but you will pay less than your current utility bill from day one.
If your profile is...
Lowest monthly + ownership at year 5, in ME or TX
Propel is the only path in 2026 that combines TPO-phase ITC capture with homeowner ownership. The TPO claims Section 48E, your principal drops, and at year 5 you exercise the EBO and the system becomes yours. Lowest monthly + ownership goal + tax credit capture, all at once.
If your profile is...
Want Propel, in MA / CT / NH / RI / VT / NJ / PA
Propel is launching state-by-state. Maine and Texas are live now; we are collecting waitlist signups for Massachusetts, Connecticut, New Hampshire, Rhode Island, Vermont, New Jersey, and Pennsylvania. While you wait, the state-specific recommendations below give you a path that works today.
Propel is currently live only in Maine and Texas. If you are outside those two states and you do not want to wait for the per-state waitlist to open, the table below is the path NuWatt most often recommends in your state. None of these is “second best” — each is genuinely strong in its own right; they just package the math differently than Propel does.
SMART 3.0 + 25-year lease
SMART 3.0 performance payments still flow to the system owner for 10 years. Pair with a reputable lease for $0 down and lowest monthly while waiting for Propel MA.
See Massachusetts guideEnergize CT Smart-E loan + ESS storage
Smart-E partner credit unions offer rates in the 5-7% range. Combine with the ESS storage performance payment for a 12-15 year payback on owned systems.
See Connecticut guideNet metering + cash or HELOC
NH retains 1:1 net metering up to 100 kW and has favorable interconnection. Cash or a HELOC at 7-8% is the cleanest path in 2026 for ownership-focused buyers.
See New Hampshire guideREG / Renewable Energy Growth + lease
Rhode Island REG performance-based incentive plus National Grid net metering keep lease economics strong for $0-down installations.
See Rhode Island guideGroup net metering + Efficiency VT rebates
VT group net metering supports community solar adoption; Efficiency Vermont covers heat pumps, weatherization, and battery adders for owned systems.
See Vermont guideNJ Clean Energy SuSI + 25-year lease
The Successor Solar Incentive (SuSI) replaces SREC-II and pays the system owner per MWh for 15 years. Lease companies pass most of that into your monthly rate.
See New Jersey guidePJM SREC + Smart-E-style credit union loan
Pennsylvania SRECs trade in the PJM market; values fluctuate with state RPS demand. A 15-year credit union loan paired with SREC sales is the strongest owned path.
See Pennsylvania guidePropel (live) or REP buyback + cash
Propel is live in Texas and is usually the lowest monthly + ownership path. If you prefer cash, target an REP plan with strong solar buyback (Rhythm, Octopus, etc.).
See Texas guideWe are running a per-state waitlist for Propel in Massachusetts, Connecticut, New Hampshire, Rhode Island, Vermont, New Jersey, and Pennsylvania. Joining the waitlist does not commit you to anything; it just gets you a notification when Propel goes live in your zip code. In the meantime, the state-specific recommendations above will give you a path that works today.
Join the Propel waitlistThe Section 48E construction-begin deadline is July 4, 2026. After that date, the bonus tier structure changes. This is not a doomsday — it is a planning window. Projects with construction begun before that deadline pursue the current up-to-30% base plus up-to-20% in stackable adders, with the realized rate verified post-installation. Projects after the deadline will still receive an ITC, but at a different rate.
Up to 30%
Base Section 48E ITC for any qualifying TPO project, subject to verification
Up to +10%
FEOC adder for domestic-content panels (Silfab 440W), when thresholds verify
Up to +10%
Energy community adder for installations in qualifying tracts, when designation verifies
Realistically, the cleanest way to be safely inside the construction-begin window is to start the design and contract process at least 90 days before July 4, 2026. That means kicking off site survey by early April 2026 if you are reading this right after publication. NuWatt is actively scheduling 2026 installations now in Maine and Texas; state-specific paths in the other seven states are available immediately.
Real homeowners, simplified profiles. The math here is illustrative — your specific numbers will differ based on roof orientation, shading, FICO, and exact program tier. But the relative ordering of paths is generally consistent across realistic profiles.
Example 1
Profile
Recommendation: Propel
At 760 FICO, Sarah qualifies for Tier 1 (8.49 percent, effective May 25, 2026). With Silfab 440W panels (Domestic Content required for all Propel projects), the FEOC adder pushes ITC to 40 percent. On a $24,000 system, she finances $14,400, pays roughly $129/month starting in year 1, and owns at year 5 via EBO.
Example 2
Profile
Recommendation: Cash + SMART 3.0
Marcus is the textbook cash buyer in 2026 — high FICO, ample liquid, ownership goal, retirement approaching. He pays $26K cash for a 7 kW system, collects SMART 3.0 performance payments for 10 years, and has zero monthly bill on day one. (Propel MA is on the waitlist; cash is the cleanest path until then.)
Example 3
Profile
Recommendation: Propel Tier 3
At 680 FICO, Diana qualifies for Tier 3 (9.69 percent, effective May 25, 2026). On a $36,000 12 kW system in Houston with Silfab and 40 percent ITC, she finances $21,600. Year-1 payment is roughly $196/month — well below her current $310 bill. EBO at year 5 transitions her to ownership without requiring upfront cash.
These are the four mistakes we hear most often from homeowners doing their own research in 2026. Each has a kernel of truth from pre-2026 economics that no longer applies.
There is no current legislation to restore Section 25D. The 2025 reconciliation bill that ended it was bipartisan, and no credible 2026 proposals exist. Planning around a hypothetical future credit means missing the current 48E construction-begin window. The smart move is to use what is available today.
It was, when 25D was alive. In 2026, cash carries the full sticker price with no federal credit offset. Total nominal payments on cash are still lowest, but if you would have invested the $30K, the opportunity cost of locking it in roof panels can exceed the interest you would pay on Propel or a loan. Cash is still the right answer for many homeowners — just not automatically.
Leases got a bad reputation in the 2010s when escalators were aggressive and transferability was clunky. Modern leases (2024+) typically have 1.9-2.9 percent annual escalators, smooth transferability at home sale, and competitive monthly rates. For a homeowner whose only goal is “pay less than my utility bill with $0 down,” a 25-year lease still works fine.
The mechanics are unusual but the structure is sound: a tax-equity investor owns the system on your roof for the first 5 years, claims Section 48E, and then transfers ownership to you via a pre-priced EBO. The math works because federal tax credits make residential rooftops attractive to commercial investors. The trade-offs are real — TPO phase, panel restriction (Silfab 440W), state availability (ME/TX) — but the program is not financial alchemy.
Full program mechanics, ITC stack, and EBO structure.
Plug in system size, FICO, and state to see live numbers.
FICO, state, $/W, and panel-tier requirements.
Counter-intuitive 25-year math when ITC is factored in.
When the EBO ownership wins vs lease simplicity.
Per-kWh PPA economics vs Propel fixed payment.
Policy timeline and what it means for homeowners.
15-minute call, all four paths priced for your home.
Tell us your bill, FICO range, state, and ownership goal. NuWatt will price all four paths for your specific home and walk you through the trade-offs. No pressure, no spam — just the numbers.
NuWatt provides this guide as an independent informational resource. Tax credit references are based on federal law as of April 2026. Consult a licensed tax professional for advice specific to your situation.