The 30% federal tax credit is gone. But state programs, utility rebates, and other incentives can still meaningfully cut your solar costs â if you know where to look.
The federal residential solar tax credit (Section 25D) was eliminated by the One Big Beautiful Bill Act signed July 4, 2025. Systems installed on or after January 1, 2026 receive NO federal tax credit â not 30%, not 26%, not anything. This page covers the state, utility, and local incentives that may still apply to your installation.
The Section 25D Residential Clean Energy Credit was the cornerstone of residential solar finance in the United States for nearly two decades. At its peak â from 2022 through 2025 â it provided a 30% federal income tax credit for homeowners who installed solar panels, battery storage, or other qualifying clean energy systems.
On a typical 8 kW residential solar system costing around $25,000, the 30% credit translated to a $7,500 reduction in federal taxes owed. For larger systems or those with battery storage, savings routinely exceeded $10,000. The credit was applied dollar-for-dollar against your federal income tax liability â not as a deduction, but as a direct credit â making it enormously valuable.
When the One Big Beautiful Bill Act eliminated Section 25D effective January 1, 2026, it fundamentally changed the economics of residential solar. A system that might have cost a homeowner $17,500 after the federal credit now costs $25,000 â a $7,500 swing. This makes state and utility incentives more important than ever.
The good news: more than a dozen states maintain their own incentive programs, and net metering, property tax exemptions, and sales tax exemptions remain in place in many states. Here's a comprehensive look at what's available in 2026.
The following state programs were active as of mid-2026. Funding for many programs is limited â programs can close or change terms without much notice. Always verify current status before making a purchase decision.
| State | Program | Benefit | Expires / Status |
|---|---|---|---|
| New York | NY-Sun Megawatt Block Incentive | Up to $5,000 cash rebate (varies by utility territory) | Program ongoing |
| California | SGIP Battery Incentive | Up to $1,000/kWh for battery storage systems | Limited funding |
| Massachusetts | SMART Program (Solar Massachusetts Renewable Target) | Monthly payments per kWh produced for 10 years | Ongoing |
| New Jersey | SREC-II Program | Sell solar certificates ~$90/MWh produced | 15 years |
| Maryland | Residential Clean Energy Grant Program | $1,000 grant for solar installations | Limited funding |
| Texas (Austin) | Austin Energy Solar Rebate | $2,500 rebate (Austin utility customers only) | Check availability |
| Colorado | Xcel Energy Solar*Rewards | Monthly bill credits per kWh (varies by tier) | Ongoing |
| Illinois | Illinois Shines (Adjustable Block Program) | $40â60/MWh via SRECs | Ongoing |
| Oregon | Oregon Solar + Storage Rebate Fund | Up to $5,000 for solar, up to $2,500 for storage | Limited funding |
| Minnesota | Xcel Energy Solar*Rewards | Per-kWh production payment, up to 20 years | Ongoing |
| Hawaii | State Income Tax Credit | 35% state credit (up to $5,000) | Ongoing |
| South Carolina | State Tax Credit | 25% of cost, up to $3,500 over 5 years | Ongoing |
| Florida | Sales Tax Exemption | No sales tax on solar equipment (6% savings) | Permanent |
| North Carolina | State Tax Credit | 15% tax credit (up to $10,500) | Check status |
Net metering allows homeowners with solar panels to send unused electricity back to the grid and receive credit on their utility bill. If your panels produce more than you use during the day, that surplus flows to your neighbors through the grid, and your meter effectively runs backward â crediting you for what you exported.
The value of net metering depends entirely on what rate your utility pays for exported electricity. Some states require utilities to credit you at the full retail rate (what you'd pay to buy electricity), while others have moved to lower "avoided cost" or wholesale rates. California's shift to NEM 3.0 in 2023 dramatically reduced export payments â a cautionary tale about how policy changes can alter solar economics.
Here's the current net metering landscape for key states:
| State | Net Metering Status | Rate Paid for Exports |
|---|---|---|
| California | NEM 3.0 (significantly reduced) | ~$0.05/kWh (much lower than retail) |
| New York | Full retail net metering | Full retail rate |
| Texas | Varies by utility | Varies widely â check your utility |
| Florida | Full retail net metering | Full retail rate |
| Arizona | Reduced (net billing) | ~80% of retail |
| Hawaii | No traditional net metering | Smart Export programs only |
| Virginia | Full retail net metering | Full retail rate |
The rates and rules shown above reflect conditions as of mid-2026 but are subject to change. Always verify current terms with your specific utility company before sizing your system based on net metering value.
Solar panels typically add $15,000â25,000 in assessed home value â which in most states would mean an increase in your annual property tax bill. Fortunately, more than 30 states have passed laws exempting solar installations from property tax assessments.
In a state with a 1.2% effective property tax rate, exempting $20,000 in added value saves you $240 per year, every year â that's $6,000 over a 25-year system life.
States with confirmed solar property tax exemptions include:
In many states, the exemption applies automatically when you install solar â no special application required. In others, you must file with your county assessor's office. Check with your local assessor or a licensed installer to confirm the process in your county.
If you live in a homeowners association (HOA), you may worry about whether your HOA can block a solar installation. The good news: 26 states have enacted solar access laws that limit an HOA's ability to prohibit solar panels outright.
These laws generally work as follows: your HOA may require you to submit a design for approval â but they cannot outright ban solar panels or impose rules that make solar installation unreasonably difficult or expensive.
States with strong solar access laws include: AZ, CA, CO, FL, HI, MD, MA, NJ, NY, OR, TX, VA, and more. If you face HOA pushback, consult your state's energy office or a solar attorney â many state solar access laws include provisions for recovering legal costs if you prevail.
Because programs change frequently, always verify current availability through authoritative sources before making purchasing decisions.
Always verify current availability with your state energy office or a licensed installer before making installation decisions. The information on this page reflects conditions as of August 2026 and may not reflect current program status.
Our free calculator factors in your state's current programs, your electricity usage, and local solar production to estimate your real payback period and savings.
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