The 30% federal solar credit
ended December 31, 2025.
For cash buyers, it's gone. The One Big Beautiful Bill Act terminated the §25D residential credit for any installation completed after December 31, 2025. Most solar reps aren't leading with that. We are. Here's the full picture: what ended, what's still available, and how the math works in 2026.
Get a Free QuoteThe One Big Beautiful Bill Act.
What it did and when.
The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025 as Public Law 119-21, eliminated the federal residential solar and battery tax credit for homeowners who buy or finance their own systems. The IRS confirmed in August 2025 FAQ guidance that the credit applies to the date the installation is completed, not when it was contracted or started.
Any solar or battery system installed and placed in service after December 31, 2025 is not eligible for the §25D credit. Period. No phase-down. No grandfathering for contracts signed before the deadline. If your system is installed in 2026, there is no 30% credit for a cash buyer.
This is the most significant change to U.S. residential solar economics in over a decade. It directly affects how the two paths compare and which one makes sense for your home.
The timeline
Three incentives that still apply.
Depending on your path.
§48E Commercial Credit
Still alive through 2027 for third-party-owned systems. When a financing company installs a system under a prepaid lease, they own the system and claim the §48E credit. They price that saving into your kWh rate from day one. You pay a lower rate than PG&E. That gap reflects, in part, the §48E credit they claimed.
You do not receive the §48E credit yourself. You cannot claim it on your tax return. The benefit comes through the lease pricing, not as a check from the IRS. This is why Path A (prepaid lease) can still reflect a federal incentive in its economics in 2026, even though cash buyers get nothing.
How Path A worksSMUD Rebate — Up to $10,000
Completely separate from the federal tax credit and unaffected by the OBBBA. SMUD's My Energy Optimizer Partner+ program pays up to $10,000 per household for a qualifying home battery installation. It applies only to homeowner-owned systems, which means cash buyers in SMUD territory, not lease customers.
For a Sacramento homeowner buying cash, the SMUD rebate partially offsets the loss of the federal credit. It does not come close to replacing it dollar for dollar, but it is real, it is current, and we file the paperwork for you.
Full SMUD rebate detailsCA §73 Property Tax Exclusion
California Revenue and Taxation Code §73 excludes qualifying active solar energy systems from property tax reassessment as new construction. This exclusion is scheduled to sunset January 1, 2027, under SB 710 signed October 2025. Systems placed in service before that date keep the exclusion through the next change in ownership.
This is not a cash payment. It means solar does not trigger a property tax increase. For a $30,000 system, avoiding a potential 1% to 1.25% annual property tax increase on that value saves roughly $300 to $375 per year for as long as you own the home.
Property tax exclusion detailsFederal tax credit notice. The 30% federal Residential Clean Energy Credit under Internal Revenue Code §25D was terminated by the One Big Beautiful Bill Act (P.L. 119-21) for expenditures made after December 31, 2025. Residential solar and battery systems installed and placed in service in 2026 or later are not eligible for the §25D credit. Third-party-owned systems (residential leases and power purchase agreements) may qualify for the §48E credit, which is claimed by the system owner, not by the homeowner, through 2027 under current law. Revolt Services is not a tax advisor. Tax outcomes depend on your individual tax situation. Consult a qualified CPA or tax professional before relying on any tax benefit.
How the math changed.
And how we approach it.
PG&E homeowner, cash buyer
No federal credit. No SMUD rebate (wrong utility). The property tax exclusion applies through Jan 1, 2027. The math now rests entirely on the rate savings and NEM 3.0 picture. Solar plus battery still pencils, but the payback timeline is longer than it was two years ago. We show you the honest numbers.
See the cash path mathPG&E homeowner, lease buyer
No direct federal credit, but the §48E credit is reflected in your lease rate. You pay a fixed kWh rate lower than PG&E. The NEM 3.0 export credit issue is largely resolved by storing with a battery. No upfront cost. The rate savings are real even without a direct tax benefit.
See the lease path mathSMUD homeowner, cash buyer
No federal credit. But the SMUD rebate up to $10,000 is still very much alive. For a Sacramento homeowner, the rebate partially offsets what the §25D credit used to provide. Add the property tax exclusion through Jan 1, 2027 and the math for a SMUD cash buyer is often still strong.
See the SMUD rebateSMUD homeowner, lease buyer
§48E reflected in lease pricing. No SMUD rebate because you don't own the system. The lease rate is still lower than SMUD's rate, but the rebate is not in the picture. For most SMUD homeowners, the cash path with the $10,000 rebate competes very directly with the lease. We model both side by side.
Compare both pathsThe free consult is where we put all of this on paper for your home, your utility, and your situation. We do not pick a path for you. We show you both on one page with real numbers from your bill.
Get a Free QuoteAlso worth reading.
How It Works
Lease vs cash. Full side-by-side with example math on both paths. No pressure.
Compare paths →SMUD Rebate
Still alive. Up to $10,000 for cash buyers in SMUD territory. We file it for you.
Full details →Property Tax Exclusion
California §73 excludes solar from reassessment through Jan 1, 2027. Timing matters.
See the sunset →Solar
Custom designed for your bill. Both paths modeled. We explain the 2026 reality upfront.
See solar →Tax credit questions
we hear every week.
Is the 30% federal solar tax credit still available in 2026?
For cash buyers, no. The federal residential solar tax credit under IRS §25D was terminated for expenditures made after December 31, 2025, by the One Big Beautiful Bill Act (P.L. 119-21). Cash and loan buyers who install solar or battery storage in 2026 are not eligible for this credit. The §48E commercial credit still applies to third-party-owned systems and is reflected in prepaid lease pricing. Consult your CPA before making any decision based on tax treatment.
What is the §48E credit and does it help me?
§48E is the commercial clean electricity investment credit. It applies to third-party-owned systems through 2027. When a financing company installs solar under a prepaid lease, they own the system and claim the §48E credit. They price that saving into your kWh rate. You benefit through a lower rate, not as a direct tax credit on your return. You cannot claim §48E on a cash purchase.
Is the SMUD rebate still available?
Yes. The SMUD My Energy Optimizer Partner+ rebate is separate from the federal tax credit and was not affected by the OBBBA. SMUD pays up to $10,000 per household for a qualifying battery, subject to current program terms and available funding. It applies only to homeowner-owned systems (cash buyers in SMUD territory), not to lease-owned systems.
Why are some solar companies still advertising the 30% tax credit?
Some have not updated their materials. Others may be using language that technically refers to §48E through leases but presenting it in ways that imply the homeowner receives a direct credit. If a rep tells you that you will receive a 30% federal tax credit on a 2026 cash purchase, ask them to show you the IRS citation. The §25D credit is terminated. Marketing it to a cash buyer is a material misrepresentation under California Business and Professions Code §17500.
Should I rush to install before some other deadline?
One real deadline exists in 2026: the California §73 property tax exclusion is scheduled to sunset January 1, 2027. Systems placed in service before that date keep the exclusion through the next change in ownership. There is no federal tax credit deadline for cash buyers because the credit is already gone. SMUD rebate funds are first come, first served and can run out. Talk to your CPA before making any decision based on tax treatment.
Get the honest 2026 math
on your home.
We model both paths on your actual bill. We tell you what changed, what's still available for your situation, and what the numbers actually look like. No same day pressure.