The solar tax credit is still available in 2026, but only through a lease, and only until December 31, 2027

Whether the solar tax credit is still available in 2026

The solar tax credit is still available in 2026, but not in the way most homeowners remember it. The 30% credit for a homeowner who buys and owns a system outright already ended, for any system placed in service after December 31, 2025, the Internal Revenue Service states. A second, separate credit is still active, but only through a lease or a power purchase agreement, an arrangement where a company owns the solar panels on a home and the homeowner pays for the electricity they produce rather than for the equipment itself. That company can still claim a federal tax credit today, if it locked in its eligibility, called a safe harbor, by starting construction on the equipment before July 4, 2026.

The credit that already ended

The Residential Clean Energy Credit, Section 25D of the tax code, is the 30% credit homeowners are used to hearing about. It covered solar panels, solar water heaters, geothermal heat pumps and home battery storage. The Internal Revenue Service states plainly that the credit is not available for any of that equipment placed in service after December 31, 2025, a date that has already passed. A homeowner buying and owning a system today gets nothing back from this credit no matter when they sign the contract.

The deadline that is still running

A different credit, Section 48E, is claimed by the company that owns a leased or power purchase agreement system, not the homeowner. An Internal Revenue Service notice on the deadline, read directly for this article, sets 2 dates. A solar project loses this credit entirely if it is placed in service after December 31, 2027, but only if construction on it began after July 4, 2026, 12 months after the One Big Beautiful Bill Act became law. A project that began construction on or before July 4, 2026 avoids that cutoff entirely and instead gets up to 4 calendar years from the year it started to be placed in service. A project that started after that date gets far less time, about 1.5 years or less depending on when it started, a gap this article calculated from the 2 dates in the notice rather than a figure the notice states outright.

What Sunrun is spending to hit that deadline

Sunrun, the largest residential solar company in the United States, told investors on its own second quarter 2026 earnings call what hitting the July 4, 2026 deadline is costing it. Chief financial officer Danny Abajian said the company generated 23 million dollars in cash in the quarter, or 45 million dollars if the 22 million dollars it spent safe harboring equipment is set aside. The company guided investors to expect 50 million to 100 million dollars in safe harbor equipment spending for the full year.

We had positive cash generation in the quarter while executing a sizable safe harbor investment.

Mary Powell, chief executive of Sunrun. Source 3.

What this means for a homeowner right now

Homeowners already lived through one rush to beat a deadline, the one that ended the buying credit. That rush is over. The one still running belongs to leasing and power purchase agreement companies, and a homeowner cannot safe harbor anything on their own behalf. Analysts expect a wave of these projects to reach completion over the next 12 to 24 months, built under safe harbor windows their companies already locked in. The only question worth asking a company selling a lease or a power purchase agreement today is whether it already locked in its equipment before July 4, 2026, because that answer decides whether the system it installs still carries a federal tax credit at all.

We saw in July and August about a four-times increase in sales, which may have been more like a five- to 10-times increase in inquiries.

Will Brown, sales director at Green Rack, a solar installer. Source 4.