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Section 25D expired December 31, 2025. If you buy solar with cash or a loan in 2026, you get $0 in federal tax credits. But solar leases and state programs still make solar affordable.
Last updated: March 3, 2026
Important: The 30% federal residential solar tax credit (Section 25D) expired December 31, 2025 under the One Big Beautiful Bill Act. Section 25C (heat pumps, efficiency) also expired. This page reflects current 2026 policy.
Homeowners received a 30% federal tax credit (Section 25D) on the full cost of a solar system. A $30,000 system meant $9,000 back on your taxes.
Section 25D was repealed by the One Big Beautiful Bill Act (OBBBA). Homeowners who purchase solar with cash or a loan get $0 federal tax credit.
Third-party owned systems (lease/PPA) still qualify for 30% under Section 48/48E. The financing company claims the credit and passes savings to you through lower monthly payments.
The solar tax credit went from a 30% extension to full repeal in under three years.
Extended the 30% residential solar tax credit (Section 25D) through 2032 — or so everyone thought.
The One Big Beautiful Bill Act repealed Section 25D and 25C. Residential solar and heat pump credits set to expire Dec 31, 2025.
The federal residential solar tax credit officially ended. Cash and loan solar purchases after this date receive $0 federal credit.
The begin-construction deadline for commercial/third-party ITC. Solar leases and PPAs signed before this date can still capture the 30% credit.
Deadline: July 4, 2026
When you sign a solar lease or PPA, a financing company installs and owns the solar system on your roof. Because the company is the system owner, it qualifies for the 30% commercial Investment Tax Credit (ITC) under Section 48/48E.
The company passes those savings to you through lower monthly lease or PPA payments. You get solar power at a discount without needing to claim any tax credit yourself.
Key Distinction
The third-party system owner (the financing company) claims the ITC, not the installer and not you. This is how homeowners still benefit from the 30% credit indirectly.
You sign a solar lease or PPA with a financing company
The company installs solar on your roof and retains ownership
The company claims 30% ITC under Section 48/48E
You pay lower monthly lease/PPA payments reflecting the credit
After 6-7 years, many leases include a buyout option at fair market value
Deadline alert: Construction must begin before July 4, 2026. Lock in your lease or PPA now to ensure the financing company qualifies for the 30% ITC.
NuWatt's Propel program connects you with vetted financing partners who handle the Section 48/48E credit. Available in Maine and Texas with $0 down and guaranteed savings from month one.
With the federal credit gone, state and local programs matter more than ever. Here's what each state in the NuWatt service area offers.
$0.65/W, capped at $5,000 (REF program)
REG: $0.27/kWh for 15-20 years
80% retail credit (post-April 2023), 125% annual cap
7% sales tax exempt, 20-year property tax exemption
None
SMART 3.0: $0.03/kWh for 20 years
1:1 retail for residential under 25 kW
Sales tax exempt, 20-year property tax exemption
None
ADI/SREC-II: $85.90/MWh for 15 years
1:1 retail, annual true-up
Sales tax exempt, property tax exempt (100%)
None
RRES: Virtual net metering credits (community solar)
1:1 retail for residential
Sales tax exempt, property tax exempt (up to $1M assessed value increase)
None (SB 303 repealed state rebate)
None
NEM 2.0: ~85% retail (100% supply + transmission + 25% distribution)
Property tax exempt (RSA 72:62, ~66% of towns)
None
None
1:1 retail for rooftop solar (NEB)
Sales tax exempt (5.5%), 100% property tax exempt statewide
None
None
1:1 retail (up to 15 kW residential)
Sales tax exempt, property tax exempt
None
SRECs available (market-priced)
1:1 retail, annual true-up (Act 35)
Sales tax exempt
None
None (deregulated market)
No statewide NM — buyback rates vary by retailer
100% property tax exempt (SB 7)
RI offers the REF rebate ($0.65/W up to $5,000). NJ and MA have long-term performance payments (ADI, SMART). Most states exempt solar from property and sales tax.
See your stateThe financing company claims the 30% ITC under Section 48/48E and passes savings to you through lower monthly payments. $0 down. Deadline: July 4, 2026.
Compare lease vs. buyMost NuWatt states still offer 1:1 or near-retail net metering, letting you sell excess solar power back to the grid and offset your electric bill.
See payback analysisSection 30C is still active through June 30, 2026. Up to $1,000 for residential EV charger installations. One of the last remaining homeowner tax credits.
See EV + solar bundlesThe 30% federal credit was a significant incentive, but it was not the only reason solar made financial sense. Electricity rates across the Northeast average $0.24-$0.30/kWh and continue rising 3-5% annually. Solar locks in your energy cost for 25+ years.
Without any federal credit, homeowners in high-rate states can still expect solar to pay for itself in 8-12 years with a cash purchase. With a lease or PPA that captures Section 48/48E savings, the economics are even better.
Grid infrastructure aging
Utilities are spending billions on grid modernization, passed on to ratepayers
Electrification demand
Heat pumps, EVs, and data centers are increasing electricity demand
Natural gas volatility
Gas prices drive marginal electricity costs, especially in the Northeast
A homeowner paying $0.28/kWh today will pay $0.36/kWh in 5 years at 5% annual increases. Solar at $3.00/W for an 8kW system ($24,000) produces roughly $2,700 worth of electricity per year at current rates — more every year as rates climb.
Full payback analysisUnlike residential, commercial solar systems still qualify for the full Investment Tax Credit under Section 48/48E: 30% base + 10% domestic content + 10% energy community + 10-20% low-income bonus. Projects must begin construction before July 4, 2026.
30%
Base ITC
+10%
Domestic Content
+10%
Energy Community
+10-20%
Low-Income
Get a free, personalized quote that includes all available state incentives and lease/PPA options with Section 48/48E savings.