Solar incentives in 2026: what’s gone, what remains

What changed at federal level

For years, the maths of home solar in the US leaned on one number: a federal tax credit worth 30% of the installed cost. A $27,000 system effectively cost $18,900, and payback periods of 6–9 years were common. Legislation in 2025 ended that credit for homeowner-owned residential systems placed in service after the end of 2025. Commercial and third-party-owned arrangements operate under different rules, which is one reason lease and PPA offers have become more aggressive — those structures let a company, rather than you, claim business-side benefits, and the fine print decides how much of that value, if any, reaches you.

The practical consequences for a 2026 buyer:

• Cash and loan purchases must stand on their own maths — sunshine, rates, export rules and price per watt. That’s exactly how every calculator on SolarMath works: incentives default to $0.
• Any quote showing a 30% federal credit line is wrong for a new homeowner system. Treat it as a competence test the installer just failed.
• State and local help matters more than ever, and it varies enormously — from meaningful battery incentives in California to little more than tax exemptions in Texas.

State notes: CA · TX · FL · AZ

California — net billing state, battery-friendly

California pairs the country’s highest electricity rates (≈31¢/kWh average, higher on tiered and time-of-use plans) with its toughest export rules. Since April 2023, new systems under the Net Billing Tariff (“NEM 3.0”) earn export credits based on the utility’s avoided cost — often worth only a few cents per kWh, and varying by hour. Solar still pays in California because the power you use yourself displaces very expensive electricity; the design goal has shifted from “max the roof” to “match your load and store the surplus.” The state battery incentive, SGIP, still funds part of storage costs for eligible households, with the strongest support for low-income and high-fire-risk customers. Property-tax exclusion for solar value also remains. Always model California systems with a low export percentage in our Savings Projector.

Texas — no state programme, real local ones

Texas has no statewide net metering law and no state tax credit, so your deal depends on your address. Two bright spots: a long-standing >100% property-tax exemption on the value solar adds to your home, and municipal utility programmes — Austin Energy and CPS Energy in San Antonio have offered per-watt rebates to their customers. In deregulated areas (most of the big metros), your retail electricity provider sets the buyback terms: some plans credit exports at the full retail rate up to your usage, others at a wholesale rate. The spread between a good and bad Texas buyback plan is worth thousands over 25 years, so read the plan’s solar rider before choosing a system size — and note that exports beyond your monthly usage are commonly credited at a much lower rate, punishing oversizing.

Florida — strong sun, retail net metering (for now)

Florida currently offers one of the friendlier deals in the Southeast: most investor-owned utilities still credit exported energy at the full retail rate under the state’s net metering rules, solar equipment is exempt from state sales tax, and a constitutional property-tax exemption keeps panels from raising your home’s assessed value. Florida has no state income tax, so no state credit exists — the value is in the billing rules and exemptions. Net metering has been politically contested in Tallahassee in recent sessions, so confirm your utility’s current tariff and any grandfathering terms before signing; the rules you interconnect under are the rules that matter.

Arizona — best in sun, stingy exports

Arizona’s 6.5 peak sun hours are the best in the continental US, but APS and the Salt River Project both pay for exports at set rates well below retail under their net-billing-style plans, and applications are locked to the export rate in effect at interconnection (with periodic resets on some plans). The winning Arizona design self-consumes: west-facing panels for the evening air-conditioning peak, load shifting, and increasingly a battery. Arizona also exempts solar equipment from sales tax at point of sale through registered dealers and bars HOAs from prohibiting solar outright. With exports underpaid, our Size Estimator‘s 100%-offset default should be trimmed toward 80–90% for most Arizona homes.

How to verify any incentive before you count it

1. Find it on an official source — IRS.gov for federal, your state energy office or DSIRE (dsireusa.org) for state and utility programmes. A salesperson’s PDF is not a source.
2. Check eligibility, not just existence — income caps, equipment requirements, programme budgets and application deadlines void many headline figures.
3. Check who claims it. Under leases and PPAs the installer or finance company may claim the benefits; your contract decides what reaches you.
4. Run your payback twice — with the incentive and without it. If the deal only works with an incentive you haven’t verified, it doesn’t work yet.

This page summarises incentive rules as understood on November 1, 2026, for general information. It is not tax or legal advice. Programmes change; verify current terms with the IRS, your state energy office and your utility before making a purchase decision.