| Quick Answer: The 30% federal residential clean energy credit (Section 25D) expired after December 31, 2025 under the One Big Beautiful Bill Act. Systems installed in 2026 do not qualify on a cash or loan purchase — and eligibility followed the installation completion date, not the date you paid a deposit. Unused credit from a 2025 installation can still be carried forward, and battery economics in California now rest on time-of-use savings rather than the credit. |
For twenty years, the federal solar tax credit was the number every solar and battery salesperson led with. It ended abruptly — no phase-down, no extension — and much of the industry’s marketing has quietly failed to update. In August 2026, a remarkable number of California solar websites still advertise a 30% credit that no homeowner buying a system this year can claim.
Here is exactly what happened, the two traps still costing people money, and what the change actually means for home battery economics in California.
What Changed on December 31, 2025
The One Big Beautiful Bill Act, signed in July 2025, terminated the Section 25D residential clean energy credit for expenditures made after December 31, 2025. That credit was worth 30% of the cost of qualifying residential clean energy property — including solar panels and home battery storage — claimed against your personal federal income tax.
The termination was a hard stop. There is no reduced-percentage version for 2026, no transition window, and no replacement federal program for homeowner-owned systems. The IRS published detailed FAQs confirming the mechanics, and the practical takeaway is blunt: a cash or loan purchase completed in 2026 receives no federal credit at all.
The Deposit Trap: Paying in 2025 Did Not Lock In the Credit
This is the detail that costs people the most money, and the one most websites get wrong. Under the tax code, an expenditure is treated as made when the original installation of the item is completed — not when you signed the contract or paid a deposit.
So a homeowner who paid a deposit in November 2025 for a system that was placed in service in February 2026 does not qualify for the credit. If a salesperson told you otherwise to close a year-end deal, the IRS guidance says the opposite, and it is worth reviewing your position with a qualified tax professional before you file.
Installed in 2025 but Couldn’t Use the Whole Credit? Carryforward Survives
One genuinely good piece of news survived the repeal. If your system was completed and placed in service on or before December 31, 2025, but your tax liability that year was too small to absorb the full 30% credit, the carryforward rules were not repealed. You can carry the unused portion of the credit forward and apply it against tax in later years.
In other words: the door closed on new expenditures, not on credit already legitimately earned. Again — confirm the specifics with your tax adviser. Solari Storage will tell you plainly what expired and what did not, but battery companies are not tax professionals and should never be your final word on a tax filing.
Why Some California Solar Companies Still Advertise 30%
Drive through any California suburb or scroll any solar ad feed and you will still see the 30% figure everywhere. There are two explanations, and they matter for different reasons:
- Some sites are simply out of date. The expiry happened fast, and marketing pages that ranked well for years are still serving 2024 information.
- Some are referring to a commercial-side credit under a lease or PPA. When a finance company owns the system on your roof, it may claim a structurally different commercial credit. That credit belongs to the finance company — not to you — and it is not a credit you claim on your own tax return.
If you are buying a system outright in 2026 and a quote includes a 30% federal credit, the quote is wrong. Solari Storage’s policy, stated on its home battery FAQ, is to tell every homeowner exactly what they qualify for in 2026 and exactly what they do not — before being asked.
What the Expiry Means for Battery Economics in California
Here is the part most coverage misses: in California, the case for a home battery was never really about the tax credit. It is about the gap between what your utility pays you for exported solar and what it charges you in the evening.
Under NEM 3.0, exported solar power earns roughly 5 to 8 cents per kilowatt-hour, while evening peak rates run 35 to 62 cents depending on your utility and season. A battery lets you store your own midday generation and use it during the 4–9 PM peak instead of selling it cheap and buying it back dear. That spread — not a federal credit — is what drives paybacks for solar-plus-storage systems in California today, alongside backup power through outages and Public Safety Power Shutoffs.
The expiry does raise the bar: without the credit, honest sizing and honest incentive verification matter more than ever, because there is no 30% cushion to hide a bad design under. Which utility programs remain open for your home is a separate, current question — one covered in detail on Solari Storage’s incentives and rebates page.
How to Get a Straight Answer in 2026
Ignore any pitch built on urgency around a credit that expired last year. The real questions are current ones: what does your rate plan charge at peak, what does your home actually consume in the evening, what incentives are verifiably open in your utility territory, and does the math work without wishful thinking. All four can be answered from a recent utility bill — and if the numbers say a battery is not worth it for your home, that answer should be on the table too.
Frequently Asked Questions
Is the 30% federal solar tax credit still available in 2026?
No. Section 25D expired for expenditures made after December 31, 2025. Systems placed in service in 2026 do not qualify on a cash or loan purchase.
I paid a deposit in 2025 but my system was installed in 2026. Do I get the credit?
No. The IRS treats the expenditure as made when installation is completed, not when you paid. If the system was placed in service after December 31, 2025, the credit does not apply.
I installed in 2025 but couldn’t use the full credit. Is it lost?
No. Carryforward survives — unused credit from a qualifying 2025 installation can be carried forward to later tax years. Confirm the details with a qualified tax professional.
Why do some companies still advertise a 30% credit?
Either their marketing is out of date, or they are referring to a commercial-side credit claimed by a finance company under a lease or PPA — which is not a credit you claim on your own return.
Does a home battery still make sense without the federal credit?
In California, often yes. The economics now rest on the gap between roughly 5–8¢ export compensation under NEM 3.0 and 35–62¢ evening peak rates — plus backup power. Whether it holds for your specific home depends on your bill.
Ready for a straight answer? Send Solari Storage a recent utility bill and find out exactly what a battery would do for your home — including if the numbers say don’t buy. Contact Solari Storage for a free assessment.
Key Takeaways
- The Section 25D residential clean energy credit expired after December 31, 2025 — with no phase-down and no 2026 eligibility for cash or loan purchases.
- Eligibility followed installation completion, not deposit date: 2025 deposits with 2026 installs do not qualify.
- Carryforward survives for credit earned on systems completed in 2025.
- A 30% figure in a 2026 quote signals either outdated marketing or a lease/PPA structure where the credit is not yours.
- California battery economics now rest on the NEM 3.0 export-versus-peak-rate gap, verified utility incentives, and honest sizing from your real bill.
