What's Left of the Inflation Reduction Act for Solar in 2026

What the IRA did, and what changed

When the Inflation Reduction Act was signed in August 2022, the federal solar credit had already fallen to 26% and was scheduled to phase out for homeowners. The IRA reversed that. It raised the Residential Clean Energy Credit (Section 25D) back to 30%, scheduled it through 2032 with a step-down after that, made standalone batteries eligible, expanded the 25C home improvement credit for heat pumps and insulation, created new EV and used-EV credits, and funded $8.8 billion in state-run home energy rebates.

For three tax years, 2022 through 2025, those credits worked as designed. Then Congress changed course. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, ended most of the IRA's household tax credits years ahead of schedule. It left the rebate programs in place and gave the commercial side of the solar market a longer runway than homeowners got.

So the honest answer to "is the IRA still helping with solar?" is: much less than it was, and in different ways. A homeowner who buys a system in 2026 gets no federal credit. A homeowner who completed one in 2025 still does. And some families can still tap federal money through state-run rebates or a lease.

The 2026 scorecard: ended vs surviving

The pattern is clear. Tax credits that individual homeowners claimed on their own returns are gone. Grant and rebate money already sent to states mostly survives, with the large exception of Solar for All. And the commercial credit that solar companies claim stayed open longer.

The 30% solar credit: ended after 2025

The centerpiece of the IRA for homeowners was the Residential Clean Energy Credit: 30% of your total system cost, no dollar cap, no income limit. Under the OBBBA, there is no credit for expenditures made after December 31, 2025, and an expenditure is treated as made when the installation is completed.

If your system was completed in 2025, you still claim 30% on your 2025 return with IRS Form 5695, and you can amend with Form 1040-X, generally within three years, if you missed it. Unused credit carried forward from earlier years is still usable. If your system was completed in 2026, the federal credit is $0, even if you signed and paid a deposit in 2025. Our federal solar tax credit guide covers the claim, the amendment and the signed-but-unfinished case in detail.

The effect on payback is significant. Without the credit, net cost equals gross cost, and a typical payback stretches about 35–45%: a system that paid back in 8–11 years now takes roughly 11–15 years before state incentives. Run your own numbers with the Payback Calculator, which now defaults to a $0 federal credit.

Battery storage: credit ended too

One of the IRA's most useful changes was making standalone batteries of 3 kWh or more eligible for the 30% credit, even when added years after the panels. That eligibility lived inside 25D, so it ended on the same date. A battery completed in 2025 still qualifies; a battery installed in 2026 is paid at full price.

That changes the battery decision more than the panel decision. At full cost, an $11,000 battery has to pay for itself through backup value, time-of-use savings or better value for stored solar in a net-billing state. In areas with full-retail net metering, it often won't. Size it honestly with the Solar Battery Calculator and read our battery worth-it guide before adding one.

Heat pump and efficiency credits

The IRA also rebuilt the Energy Efficient Home Improvement Credit (25C): 30% of cost, up to $2,000 a year for heat pumps, heat pump water heaters and biomass equipment, up to $1,200 for insulation, windows, doors and other upgrades, and up to $150 for a home energy audit. The OBBBA allows no 25C credit for property placed in service after December 31, 2025. Geothermal heat pumps, which used the uncapped 25D credit, ended at the same time.

For heat pumps, the surviving federal help is the HEAR rebate (below), which can be worth far more than 25C ever was for households that qualify. Our heat pump tax credit guide covers what is left in detail, and the Heat Pump Cost Calculator now prices installs with a $0 federal credit.

EV and charger credits

Solar buyers often paired panels with an electric car and a home charger. Those credits are gone too. The new-vehicle credit (30D) and used-vehicle credit (25E) ended for vehicles acquired after September 30, 2025. The 30C credit for home charging equipment ended for property placed in service after June 30, 2026, so as of today it is over. If you installed a charger by that date, claim it on your 2026 return. Our solar and EV charger guide shows how to size a system for an EV now that both credits have ended.

What survived: HEAR and HOMES rebates

The IRA's Home Energy Rebates, $8.8 billion in total, were not repealed. The money flows to state energy offices, which design and run the programs. That means availability, timing and the application process differ from state to state; some states have launched, others are still setting up or have limited funds.

• HEAR (Home Electrification and Appliance Rebates), sometimes called HEEHRA: point-of-sale rebates for income-qualified households on heat pumps, heat pump water heaters, electrical panels, wiring, insulation and electric cooking.
• HOMES (Home Efficiency Rebates): performance-based rebates tied to measured or modeled whole-home energy savings, open across income levels, with larger amounts for lower-income households.

Households at or below 80% of area median income (AMI) can have up to 100% of the cost covered, up to each cap; households between 80% and 150% of AMI can get up to 50%. Above 150%, HEAR doesn't apply.

HEAR and HOMES don't pay for solar panels themselves. But they matter for solar buyers in two ways. First, many solar-plus-electrification projects need a panel upgrade ($4,000 under HEAR) or new wiring ($2,500). Second, pairing solar with a heat pump is how many homes get the most from their panels, and HEAR can cover most of the heat pump. Start at energy.gov/save/rebates to find your state's program.

Leases and PPAs: the 48E credit

The IRA also created the Section 48E clean electricity credit, a commercial credit that companies claim when they own a solar system, including a system on your roof under a lease or power purchase agreement (PPA). The OBBBA did not end it on the same date as the homeowner credit.

A third-party owner may still claim 48E on residential solar if construction began by July 4, 2026, or if the system is placed in service by December 31, 2027. Rules restricting components and sourcing from foreign entities of concern (FEOC) apply, so not every system qualifies. Leased solar water heating and small wind are excluded.

For a homeowner, this means a lease or PPA may be priced to reflect a credit you can no longer get by buying. Whether it is, and by how much, depends on the company. Ask any installer offering a lease or PPA whether they expect to claim 48E on your system, how it shows up in your rate, and what you will pay in total over the term including escalators. Compare that with cash and loan offers in our lease vs buy vs loan guide.

Solar for All: in court

The IRA's Greenhouse Gas Reduction Fund included the $7 billion Solar for All program, which sent grants to states, tribes and nonprofits to bring solar to low-income households. In August 2025, the EPA moved to terminate the program. That termination is being challenged in litigation, and the outcome is not settled.

Practical advice: don't count on Solar for All money for a 2026 project. If a contractor or community program says your system will be funded by it, ask for written confirmation that funds are committed to you, and have a plan for what happens if they are not. Our free solar panels guide covers how to spot offers that lean on programs that may not pay out.

Key dates, 2022–2027

The IRA was designed to give homeowners a decade of certainty. In practice it delivered about three and a half years. That is worth remembering when you read any long-range incentive promise: plan around what is in effect when your project is completed.

Who still benefits

• Anyone who completed a system in 2025. The full 30% is still claimable, and carryforwards from earlier years still count.
• Income-qualified households. HEAR can cover up to 100% of a heat pump, panel upgrade or wiring project, up to the caps, where the state program is open.
• Households doing whole-home efficiency work. HOMES rewards measured savings across income levels.
• Lease and PPA customers, possibly, if the owner claims 48E and passes some of it through.
• Homeowners in strong state-incentive states. State credits, SRECs and net metering were never part of the IRA and still work. See our state incentives hub.

The group that lost the most: middle- and higher-income homeowners who planned to buy solar, a battery, a heat pump or an EV in 2026 or later with cash or a loan. For them, federal support went from 30% to nothing.

Myths that are now wrong

• "The 30% credit is locked in through 2032." It was, under the 2022 law. The OBBBA ended it for systems completed after December 31, 2025.
• "I signed in 2025, so I'm grandfathered." No. The credit follows the completion date, not the contract or deposit.
• "The whole IRA was repealed." Also no. HEAR and HOMES rebates survive, 48E may still apply to leased solar, and 2025 installs can still be claimed.
• "A battery still gets 30% if I add it later." Only if it was completed by December 31, 2025.
• "Solar for All will pay for my panels." The program is in litigation after the EPA moved to end it. Treat it as uncertain.
• "Without the credit, solar never pays off." Payback is longer, but in high-rate states, SREC states and places with full-retail net metering, solar still pays back well within the life of the panels.

How to capture what's left

1. If you completed a system in 2025, claim the 30% on Form 5695 with your 2025 return, or amend with Form 1040-X if you already filed.
2. Keep claiming carryforwards from earlier years on each year's Form 5695.
3. Check HEAR and HOMES status for your state at energy.gov/save/rebates, and compare your income with your area median.
4. Ask lease and PPA providers about 48E and FEOC compliance, and compare their total cost with cash and loan offers.
5. Stack state and local incentives: state tax credits, SRECs, net metering, property and sales tax exemptions, and utility rebates.
6. Re-run every quote at $0 federal credit. Any 2026 quote that subtracts 30% is out of date.

A short conversation with a tax professional is worth it if you are amending, carrying forward credit, or had a project that straddled the end of 2025.

What it means for you in 2026

• A solar system completed in 2026 gets no federal tax credit. Net cost equals gross cost.
• A battery installed in 2026 gets no federal credit either, so it has to earn its own keep.
• Heat pumps and electrification work can still get HEAR and HOMES rebates where your state's program is open.
• Leases and PPAs may carry a 48E credit that the owner claims; ask how it affects your price.
• State incentives now decide whether solar pencils out where you live.