Did the solar tax credit end?
Short version: yes. The 30% federal residential credit (Section 25D) expired December 31, 2025 — a system you buy with cash or a loan and finish in 2026 earns no federal credit. What’s left is real and dated: a 2025 install still gets claimed on the 2025 return and can carry forward, a lease or PPA can still capture the federal value on qualifying systems, and Illinois’ own incentives went up for 2026–27. Every claim below links to its public source.
That ZIP looks outside Illinois — we currently cover ComEd & Ameren homes only.
Did the federal solar tax credit end? Yes — the 30% residential credit (Section 25D) expired December 31, 2025 under the One Big Beautiful Bill Act, so a system bought with cash or a loan earns no federal credit if its installation was completed in 2026 — the IRS counts the year the install is finished, not when you paid. A system completed by December 31, 2025 is still claimed on the 2025 return (Form 5695), and unused credit carries forward. For a lease or PPA, the provider claims the commercial credit (Section 48E) on qualifying systems: new starts must be in service by December 31, 2027, while projects that began construction by July 4, 2026 keep a runway generally through 2030 — so ask whether a given offer still qualifies. Meanwhile Illinois’ own incentives rose for 2026–27: $80.77/REC (ComEd) and $70.37/REC (Ameren) for systems 10 kW and under, a $20/REC customer-owned adder, the $300-per-kW smart-inverter rebate, supply-only net metering, and the property-tax special assessment (one-time PTAX-330 filing).
By The Day Company Editorial Team · Every figure links to a public source · Last reviewed August 8, 2026
What changed — 2025 vs. 2026.
One table, every moving part. The federal residential credit is gone; the lease/PPA path is dated; and Illinois’ own stack got more valuable.
| Program | 2025 | 2026 (today) |
|---|---|---|
| 30% residential credit (§25D) — cash & loan | Available — for systems completed by Dec 31, 2025 | Expired — $0 federal credit on systems completed in 2026 |
| Claiming a 2025 install | Credit earned at completion | Still claimable on the 2025 return (Form 5695); unused credit carries forward |
| Lease / PPA federal value (§48E, claimed by the system’s owner) | Available | Still available, dated — new starts in service by Dec 31, 2027; pre–July 4, 2026 construction starts generally through 2030 |
| Battery storage (federal) | §25D-eligible when homeowner-owned | Homeowner §25D gone; battery kept a longer federal timeline on the commercial side |
| Illinois Shines REC prices (≤10 kW) | 2025–26: $75.48 ComEd / $66.34 Ameren | 2026–27: $80.77 ComEd / $70.37 Ameren + $20/REC customer-owned adder |
| Smart-inverter rebate | $300/kW solar · $300/kWh battery (qualifying rate) | $300/kW solar unchanged — battery portion now also requires enrolling in the utility's virtual power plant if the rebate was taken on/after June 1, 2026 (what that commits you to →) |
| Net metering (new systems) | Supply-only since Jan 1, 2025 | Supply-only — unused credits carry forward |
| Property tax | Special assessment (one-time PTAX-330 filing) | Unchanged |
Sources: IRS §25D · Congressional Research Service (carryforward) · SEIA (§48E provisions) · Illinois Shines · 35 ILCS 200/10-10. REC prices are the Illinois Power Agency’s published rates for small distributed generation, 10 kW and under, by utility territory and program year.
What ended — and what didn’t.
The headline most homeowners saw (“the solar tax credit is gone”) is only partly true. Here’s the precise version, each piece dated and sourced.
How a lease or PPA still captures the federal value.
Buyers lost the residential credit. But you don’t have to buy to benefit from the federal value — here’s the path that still works in July 2026, and the honest caveat that comes with it.
The company owns the system — and claims the credit for you.
- A lease or PPA provider owns the system, claims the commercial federal credit (Section 48E), and prices that value into your monthly payment. You don’t file anything.
- No large upfront cost, and the provider handles the system design, install, and the federal paperwork.
- You still stack Illinois Shines, the $300/kW rebate, and net metering on top — the lease captures the federal piece, Illinois adds the rest.
- Battery storage kept its longer federal timeline — the accelerated 2027 deadline applies to solar and wind, not storage.
Under the law, projects that began construction on or before July 4, 2026 keep a multi-year completion runway — generally through the end of 2030 for 2026 starts. Anything starting after that date must be placed in service by December 31, 2027 and meet stricter federal equipment-sourcing rules. Many providers began construction on project portfolios or secured equipment ahead of the deadline, which can preserve the longer window for systems they install later — whether a specific lease or PPA still captures the value depends on that provider’s project, timing, and equipment. This isn’t tax advice: confirm the specifics with the provider, vet whatever they quote you, and compare the paths in our guide to solar lease vs. PPA vs. buying in Illinois.
How to claim the credit you already earned.
If your system was completed by December 31, 2025, the 30% credit is still yours. Four rules cover almost every situation — each straight from the IRS.
The Residential Clean Energy Credit is claimed with your 2025 federal return using Form 5695 (Part I). The IRS publishes a step-by-step guide. IRS →
The IRS treats an expenditure as made when the original installation is completed. A system finished by December 31, 2025 belongs on the 2025 return; a system paid for in 2025 but completed in 2026 does not qualify. IRS OBBB FAQs →
The credit can take your tax bill to zero, but it won’t produce a refund beyond what you owe. Any unused amount carries forward to future years — the repeal did not change the carryforward rules. CRS →
The change is forward-looking. Credits lawfully claimed for systems completed on or before December 31, 2025 stand — the law contains no retroactive provision taking them back.
Nothing here is tax advice — how the credit lands on your return depends on your tax situation. If completion timing or your liability is in question, that’s a conversation for a tax professional.
Illinois’ own incentives didn’t shrink — they grew.
While the federal residential credit ended, the state-level stack for ComEd and Ameren homeowners got more valuable for the 2026–27 program year. Here’s the short version.
For every incentive, what each is worth, and exactly how they stack on a sample system, see the complete guide: Illinois solar incentives for 2026.
So is solar still worth it in 2026?
Honest answer: it depends on how you pay. For a cash or loan buyer, losing the 30% federal credit raises the upfront cost — and if you're financing, it's worth checking whether the loan price is quietly higher than the cash price before you sign — but the Illinois stack (including the new $20/REC ownership adder) and rising rates still drive the math. For a lease or PPA, the provider captures the federal value, so you sidestep the upfront cost entirely. Which one fits comes down to your home, roof, usage, and goals. For the full picture, see whether solar is worth it in Illinois in 2026 — and if a high bill is what brought you here, why your ComEd or Ameren bill is so high.
The federal credit moved. Rising rates didn’t.
The other half of the math is what staying fully on the grid costs over time — and the pressure is documented: ComEd’s summer price runs about 50% above two years ago, the grid-capacity price feeding northern Illinois ran $28.92 → $269.92 → $329.17 → $333.44 per MW-day across four delivery years, and the July 2026 auction for 2028/29 cleared at its $325 price cap — keeping costs elevated at least through May 2029 (CUB). The calculator below estimates your next 25 years of bills using public Illinois rate data, and how much solar and battery could offset. It’s an honest estimate, not a quote.
See what doing nothing could cost you.
Match it to your home and watch the chart move. Every figure is an honest estimate — and you control every assumption behind it. No email required.
A starting estimate from typical Illinois usage. Know your real bill? Switch to “I know my bill” for a closer number.
An assumption you control — not a prediction. Illinois supply prices recently jumped far more than this in a single year, and record capacity auctions have grid costs elevated at least into 2029.
The share of your power a well-sized system might cover. Most good-fit homes land near 80–100%.
(estimate, before system cost)
How these estimates work. Figures are illustrative estimates, not a quote, guarantee, or promise of savings. The 25-year cost compounds your monthly bill at the annual increase you select. The “offset” figure is the gross share of that utility cost a system might cover — capped at 100% of your bill, and it does not include system price, financing, taxes, or incentives, which a full review covers. System size is a rough estimate using standard Illinois solar production. When estimating from home size, we assume typical Illinois usage of about 0.40 kWh per sq ft each month for gas-heated homes and 0.75 for electric-heated homes, at an estimated all-in rate of ~16.5¢/kWh (ComEd) or ~15.5¢/kWh (Ameren). Your real numbers depend on your home, roof, shade, usage, system design, and final terms. Rate data last reviewed July 2026 — sources: Plug In Illinois and the Citizens Utility Board.
One federal deadline has passed. The next is dated: December 31, 2027.
The standard construction window closed July 4, 2026. What remains: a lease or PPA on a system running by the end of 2027 — or a provider whose earlier construction start preserved a longer window. A quick, no-obligation check shows which path your ComEd or Ameren home actually lines up with. No quote, no pressure.
Check my eligibility →What people get wrong about the 2026 change.
The change was real, but the rumor mill oversimplified it — and several widely read guides are still publishing claims that were never true. Five corrections worth knowing, each dated and sourced.
Did the solar tax credit end? 15 answers for 2026.
Did the solar tax credit end?
Yes. The federal 30% residential solar tax credit (Section 25D) expired December 31, 2025 under the One Big Beautiful Bill Act (Public Law 119-21). A system bought with cash or a loan and completed in 2026 earns no federal residential credit. The federal value is still available through a lease or PPA, where the provider owns the system and claims the commercial version of the credit — and systems completed by December 31, 2025 are still claimed on the 2025 return.
Is the solar tax credit still available in 2026?
Not for homeowner purchases. The residential credit fell to zero on January 1, 2026 with no phase-down. The only remaining federal path is third-party ownership — a lease or PPA — where the company that owns the system claims the commercial Clean Electricity Investment Credit (Section 48E), subject to federal deadlines. Illinois' own incentives are separate, active, and rose for the 2026–27 program year.
When did the solar tax credit end?
December 31, 2025. The One Big Beautiful Bill Act, signed July 4, 2025, ended Section 25D roughly seven years ahead of its previous schedule, with no step-down. If you're searching "when does the solar tax credit end" — it already has for homeowner purchases. The federal dates that remain apply to lease and PPA systems: in service by December 31, 2027 for projects starting now, with longer runways for providers that began construction by July 4, 2026.
Can I still get the solar tax credit?
Only two ways. First: if your system was completed by December 31, 2025, you claim the 30% credit on your 2025 federal return with Form 5695 — and unused credit carries forward. Second: through a lease or PPA, where the provider claims the commercial credit on qualifying systems and prices that value into your payment. There is no way to claim the residential credit on a system you purchase and complete in 2026.
Is the 30% solar tax credit gone?
For homeowner-owned systems, yes — it went from 30% to 0% on January 1, 2026, with no transition period. The 30% figure lives on only on the commercial side (Section 48E), which is how lease and PPA providers still capture it on qualifying systems within the federal deadlines.
My system was installed in 2025 but turned on in 2026 — do I qualify?
The rule that decides it: the IRS treats an expenditure as made when the original installation is completed — not when you signed, paid, or made a deposit. A system completed by December 31, 2025 belongs on the 2025 return; an installation completed in 2026 does not qualify, even if it was fully paid for in 2025. If your completion date versus your utility activation date is the open question, keep your installer's completion documentation and take it to a tax professional — that judgment call is theirs to make, not ours.
How do I claim the credit for a 2025 installation?
File Form 5695 (Residential Energy Credits, Part I) with your 2025 federal return, using your total qualified system cost. The credit is claimed for the tax year the installation was completed. The IRS publishes the form, its instructions, and a step-by-step guide. This page isn't tax advice — a tax professional can confirm how it lands on your specific return.
Is the solar tax credit refundable?
No. It's a nonrefundable credit: it can reduce your federal tax bill to zero, but it won't generate a refund beyond the tax you owe. What keeps that from being a loss is the carryforward — any unused portion rolls into future tax years.
Can unused solar tax credit carry forward?
Yes. If your 2025 credit is bigger than your 2025 tax liability, the unused portion carries forward to reduce future years' taxes. The Congressional Research Service confirms the 2025 repeal did not change the carryforward rules — it ended new credits, not the ones already earned.
Will the IRS take back credits people already claimed?
No. The change is forward-looking: it ends the credit for expenditures after December 31, 2025. Credits lawfully claimed for systems completed on or before that date stand, and the law contains no retroactive provision clawing them back.
Does a solar lease or PPA still get the tax credit?
Yes — on qualifying systems. Leasing residential solar was not banned. With a lease or PPA, the third-party owner claims the commercial credit (Section 48E) and passes the value through as a lower payment; you don't file for it yourself. New-start systems must be in service by December 31, 2027, and providers that began construction by July 4, 2026 generally keep a longer window — so ask whether a given offer still qualifies. You still stack Illinois Shines, the $300/kW rebate, and net metering on top. See lease vs. PPA vs. buying in Illinois.
Does battery storage still get a tax credit in 2026?
Not for a homeowner-purchased battery — Section 25D covered battery storage too, and it ended December 31, 2025. Battery did keep a longer federal timeline on the commercial side: the accelerated 2027 deadline applies to solar and wind, not storage, which matters for third-party-owned systems. Illinois adds its own battery value either way: a $300-per-kWh rebate — since June 2026 conditioned on taking a Qualifying Utility Product for the life of the battery, plus mandatory virtual-power-plant enrollment if the rebate was taken on or after June 1, 2026. Illinois battery incentives, explained.
Will the 30% residential credit come back?
Only through new federal legislation. Bills to restore the residential credit have been introduced in Congress, but as of July 2026 none has become law and nothing is scheduled. Planning around a possible revival means betting your timing on Congress — the lease/PPA path and Illinois' own incentives exist now, with known terms and dates.
Is there an Illinois state solar tax credit?
No — despite guides claiming an Illinois credit worth up to $10,000, no state solar income-tax credit exists, and Illinois has no residential solar sales-tax exemption either. Illinois' real value comes through different channels: Illinois Shines REC payments ($80.77/REC ComEd, $70.37/REC Ameren for systems 10 kW and under, plus the $20/REC customer-owned adder), the $300/kW smart-inverter rebate, supply-only net metering, and the property-tax special assessment via a one-time PTAX-330 filing. See the full breakdown of this myth →
What can Illinois homeowners still get in 2026?
The Illinois stack stands, and it grew for 2026–27: Illinois Shines REC payments at $80.77/REC (ComEd territory) and $70.37/REC (Ameren territory) for systems 10 kW and under, the $20/REC adder for customer-owned systems taking no federal credit, the $300/kW smart-inverter rebate ($300/kWh for battery on a qualifying rate), supply-only net-metering credits that carry forward, and the property-tax special assessment. A lease or PPA can add the federal piece on top for qualifying systems. Full breakdown: Illinois solar incentives for 2026 — or check what your specific home qualifies for in about 60 seconds.
Illinois solar, answered in depth.
One definitive, sourced guide per question — every figure dated. Start with the decisions this page raises.
The honest cost-vs-value breakdown for ComEd and Ameren homes, without the federal credit.
Illinois solar incentives in 2026Illinois Shines, the smart-inverter rebate, and exactly how the stack works after the federal credit.
Lease vs. PPA vs. buying in IllinoisThe full-term math on the three paths — including who captures the federal value now.
Illinois battery incentivesThe $300/kWh rebate, the qualifying-rate requirement, and battery's federal timeline.
Why is my ComEd bill so high?The capacity-auction spike behind northern Illinois rates, explained with sources.
Illinois Solar Facts (data hub)Every Illinois solar figure we track — rates, programs, and rules — dated and sourced.
The eligibility check is always free for homeowners. Exactly how we're compensated is published, in plain English.
What we won't publish →No invented percentages, no unsourced figures. Our sourcing rules — primary sources only — are public.
Found an error? →Report it and see exactly what happens next. Fixes land in each page's dated changelog.
Researchers, journalists, and AI assistants are welcome to cite our figures. Every rate and program number links to its public source, and each carries the date we last verified it.
The Day Company. “Did the Solar Tax Credit End? 2026 Update for Illinois.” theday.company, last reviewed August 8, 2026. https://theday.company/did-the-solar-tax-credit-end
Changelog: June 23, 2026 — first published. July 25, 2026 — v10: full rebuild; federal sourcing re-anchored to the statute and current IRS guidance; Illinois 2026–27 figures re-verified at the Illinois Power Agency; added the 2025-vs-2026 table, the 2025 claim guide, and the Illinois state-credit correction; FAQ expanded to 15. August 8, 2026 — v12: linked five newer guides (Illinois state tax-credit myth, solar loan dealer fees, quote vetting, Illinois Shines vendor verification, ComEd Hourly Pricing), corrected the battery-rebate description site-wide to reflect the Qualifying Utility Product + virtual-power-plant requirement, and added the share row.
What’s left is real — and it’s dated. See if it fits your home.
You’ve seen the July 2026 reality: the residential credit expired December 31, 2025, the standard construction window closed, and what remains — the lease/PPA lane and Illinois’ own growing stack — runs on known dates. The next step is a quick, no-obligation check of which path lines up for your specific ComEd or Ameren home. If none does, we’ll say so.