The short answer
- Homeowners who buy get no federal credit for solar or batteries finished after Dec 31, 2025. The 30% Residential Clean Energy Credit (25D) ended under the One Big Beautiful Bill Act.
- What counts is when installation was completed: paying in 2025 doesn't help if the work finished in 2026 (IRS).
- Leases and PPAs still get a federal credit, claimed by the company that owns the system (48E), but only for solar placed in service by Dec 31, 2027 unless construction began by Jul 4, 2026. Batteries aren't subject to that cutoff.
- California has no state income-tax credit for home solar. Local utility rebates (Pasadena, Burbank, Riverside, Anaheim) are listed on utility pages.
What ended
The One Big Beautiful Bill Act (signed Jul 4, 2025) ended the 25D credit for "any expenditures made after December 31, 2025", including batteries (which 25D had covered since 2023). The IRS FAQ explains that an expenditure is made when installation is completed. The energy-efficient home improvement credit (25C) also ended for property placed in service after Dec 31, 2025.
What's left: the credit on leases and PPAs
When a company owns the system on your roof (a lease or power purchase agreement), the company may claim the business energy credit (48E). Under the new law, solar must be placed in service by Dec 31, 2027, unless construction began by Jul 4, 2026; energy storage is exempt from that wind-and-solar cutoff. Projects starting construction after Dec 31, 2025 also face foreign-entity sourcing rules (ยง70513; IRS Notice 2025-42).
A lease company may pass some of that credit to you as a lower monthly payment, but you don't claim anything yourself. Ask how the credit is reflected in your price.
What it means for a 2026 purchase
- Compare cash and loan quotes at full price: there's no 30% to subtract.
- Be skeptical of a salesperson promising a homeowner tax credit for a system finished in 2026.
- Weigh a lease or PPA honestly: no upfront cost and a federal credit behind the price, but you don't own the system, and selling a house with a lease means transferring it to the buyer. See lease vs. buy.
- Get it finished in 2026 if you can: California's property-tax exclusion for new solar ends for systems completed after Dec 31, 2026 (details).
Not tax advice. Ask a tax professional about your situation.
Checked against official sources on Oct 1, 2026. Sources are linked in the text. Not legal, tax or financial advice.