Federal Solar Tax Credit in 2026: What CT & MA Homeowners Can Do Now
The federal 25D homeowner solar credit ended for installs completed after 2025. See what CT and MA homeowners can still compare in 2026.
The IRS says the federal homeowner solar credit, section 25D, is not available for any property placed in service after December 31, 2025. SunPol Solar, a solar installer serving Connecticut and Massachusetts, explains what that means for a 2026 installation, which ownership paths remain, and which state programs are still worth checking.
This is general information, not tax advice; consult a tax professional about your situation.
Is the federal solar tax credit still available in 2026?
No, not for homeowners installing a new system. The IRS says the Residential Clean Energy Credit (section 25D) "is not available for any property placed in service after December 31, 2025." The change came from Public Law 119-21, the One, Big, Beautiful Bill Act. A home system completed in 2026 does not qualify, in Connecticut, Massachusetts or any other state.
Before the change, section 25D ran to property placed in service through 2034. Section 70506 of the law replaced that end date with "any expenditures made after December 31, 2025" (Public Law 119-21, Congress.gov).
Credit wording on solar websites can be out of date, so confirm the rule on the IRS Residential Clean Energy Credit page.
When does a solar installation count for the federal solar tax credit?
The IRS ties the timing to installation, not payment. Its OBBB FAQ (FS-2025-05) says an expenditure "is treated as made when the original installation of the item is completed." If installation was completed after December 31, 2025, the homeowner cannot claim the section 25D credit, even if the system was paid for in 2025.
For systems installed in time, the IRS says to file Form 5695 and claim the credit "for the tax year when the property is installed, not merely purchased."
The credit is nonrefundable. The IRS says any excess unused credit can be carried forward to reduce the tax you owe in future years.
If your system was installed before 2026, ask a tax professional about any claim or carryforward on your return.
Which federal solar tax credits remain for system owners in 2026?
Sections 48E and 45Y are business credits, not homeowner credits. The IRS says taxpayers "with a qualified facility" may claim 48E, and that "qualified facility owners" can claim 45Y. In a lease or PPA, the company that owns the system is the taxpayer; whether it qualifies for any credit depends on federal tax law and its own facts.
Public Law 119-21 also changed these business credits for solar:
- Placed-in-service deadline. Public Law 119-21 ends the 45Y and 48E credits for wind and solar facilities placed in service after December 31, 2027, for facilities whose construction begins after July 4, 2026 (12 months after the law was enacted). Other conditions in the law also apply.
- Leasing arrangements. The law also added rules that deny these credits for certain leased wind and solar property.
How these rules apply to a specific home contract is a question for the system owner and its tax advisers. A homeowner should not assume any credit is passed through to them. Ask the provider to put who owns the system, and what you pay, in writing.
How does the end of the federal solar tax credit affect leases, prepaid leases and PPAs?
For installations completed in 2026, the homeowner 25D credit is unavailable on every path: cash, loan, lease or PPA. What differs is who owns the system. With SunPol Solar's Prepaid Solar Program, SunPol owns it. With a PPA, the financing partner owns it. With cash or a loan, you do.
| Ownership path | Who owns the system | Federal homeowner credit (25D) for installs completed in 2026 | What to check |
|---|---|---|---|
| Cash purchase | You | Not available | Purchase price, warranty terms and the state programs that apply to owners |
| Loan (for example, a CT Green Bank Smart-E loan through participating lenders) | You | Not available | Rate, terms and lender approval |
| Prepaid Solar Program (25-year prepaid lease) | SunPol | Not available | In service (PTO) by December 31, 2027 for this offer; transfer and end-of-term options in the agreement |
| Propel (SolSource energy services agreement + loan) | SolSource at installation; the funded buyout is normally applied after Contract Year 5 unless you opt out, subject to the agreement | Not available | Loan terms; loan payments continue after ownership transfers |
| Solar PPA (through a financing partner) | The PPA provider | Not available | Per-kWh rate, annual escalator and term; you pay for the power it produces, and utility charges may remain |
The Prepaid Solar Program is a 25-year prepaid lease with one price, paid upfront. Its program price is 30% less than buying the same system. The program price is not a tax credit or cash rebate. The system must be in service (PTO) by December 31, 2027 for this offer. In Massachusetts, the payment schedule and agreement terms are set out in your written agreement. See how the prepaid solar lease works.
With Propel, a loan funds a prepaid SolSource energy services agreement. Propel is a SolSource program, not a SunPol product. It offers a potential 25–35% program-price discount versus buying the same system; your exact percentage depends on your project and is confirmed in your written proposal. It is not a tax credit, and your loan payments continue after any ownership transfer.
A solar PPA runs through a financing partner, starting from 16¢/kWh for qualified customers with an annual escalator of 0%–2.99%. You pay for the power it produces, and utility charges may remain.
In the 12 Connecticut towns served by a municipal electric utility, SunPol offers only cash purchase or a loan. Compare all paths on the financing page.
What Connecticut solar incentives remain without the federal tax credit?
Connecticut's own programs continue. SunPol Solar's Connecticut incentives guide lists a sales tax exemption for solar systems, a local property tax exemption for qualifying homes, the RRES Netting and Buy-All tariffs for Eversource and UI customers, and Energy Storage Solutions battery incentives. Which ones apply depends on how you pay, your utility and your system.
- Sales tax exemption. On a purchased system, it is applied at sale. With a prepaid lease or PPA, the provider buys the equipment.
- Property tax exemption. An application must be filed with your town assessor, and a provider-owned system can also qualify.
- RRES tariffs. RRES has compensated new residential solar for Eversource and UI customers since 2022, replacing legacy net metering.
- Energy Storage Solutions (ESS). Enrollment and performance incentives for qualifying batteries, for Eversource and UI customers.
- Municipal utilities. Homes served by a municipal utility follow that utility's rules.
Program values change, so check the details as of the date you sign. SunPol's Connecticut solar incentives guide covers each program.
What Massachusetts solar incentives remain without the federal tax credit?
Massachusetts has its own programs. SMART 3.0 pays small systems a flat incentive per kWh generated. Customers of Eversource, National Grid or Unitil may net meter. State law allows a personal income tax credit for renewable energy source property at a principal residence. Rules and values change, so check each one as of November 2026.
- SMART 3.0. The SMART 3.0 program is run by the Massachusetts Department of Energy Resources under 225 CMR 28.00.
- Net metering. Under the Massachusetts net metering guide, customers receive bill credits for billing periods when they export more electricity than they use.
- State income tax credit. Under Massachusetts General Laws chapter 62, section 6(d), and 830 CMR 62.6.1, the credit is 15% of the net expenditure for renewable energy source property or $1,000, whichever is less. It cannot exceed your Massachusetts income tax for that year, and excess credit can carry over for up to three years.
The regulation says the costs of leasing renewable energy source property are not eligible expenditures. Ask a tax professional how the state credit applies to your situation.
Investor-owned utilities and municipal light plants in Massachusetts do not all use the same solar program. See SunPol's Massachusetts solar company page.
Is the 2027 solar deadline tied to the federal tax credit?
No, not for homeowners. The section 25D homeowner credit ended for installations completed after December 31, 2025, so no homeowner tax credit is tied to 2027. SunPol Solar's December 31, 2027 date is a condition of its Prepaid Solar Program offer: the system must be in service, meaning the utility has issued permission to operate (PTO), by that date.
Signing a contract, paying a deposit or scheduling installation alone does not meet that condition.
Read what the 2027 date means for Connecticut homeowners.
Take Action
Talk to a local SunPol advisor
Schedule your free consultation by phone or in your home, you choose.
Common Questions
Frequently Asked Questions
Can I still claim the federal solar credit if I paid my installer in 2025?
Not if installation was completed after December 31, 2025. The IRS says an expenditure is treated as made when the original installation is completed, so a 2025 payment does not qualify a system installed in 2026. This is general information, not tax advice; consult a tax professional about your situation.
Does a home battery installed in 2026 qualify for the federal homeowner credit?
No. Battery storage became a qualified 25D expense in 2023, but the IRS says the credit is not available for any property placed in service after December 31, 2025. Connecticut's Energy Storage Solutions program is a separate battery incentive for Eversource and UI customers.
Does a solar lease or PPA give me a federal tax credit?
No federal homeowner credit applies to a lease or PPA installed in 2026. The company that owns the system is the taxpayer; whether it qualifies for any credit depends on federal tax law and its facts, and none of it is a credit to you. Compare the contract on its own terms: payments, escalator, term and who maintains the system.
Can I carry forward an unused 25D credit?
The IRS says the credit is nonrefundable and that excess unused credit can be carried forward to reduce the tax you owe in future years. That applies to qualifying property installed by December 31, 2025. This is general information, not tax advice; consult a tax professional about your situation.
Is the 30% in SunPol's Prepaid Solar Program a tax credit?
No. The Prepaid Solar Program's price is 30% less than buying the same system. It is a lower program price, not a tax credit or cash rebate. The system must be in service (PTO) by December 31, 2027 to qualify for this offer.
Customer Reviews
5-Star Google Reviews
Get your free custom solar design.
A solar advisor will review your electric bill and build a system designed around your home — whether you’re in Connecticut or Massachusetts. Not a template, not a guess.
- 125B Rockwell Rd, Newington, CT 06111
- contact@sunpolsolar.com
We talk through every design with you, one home at a time.
Pick a time that works for you. A SunPol advisor will call to walk through your custom design — no pressure, no home visit required.
