This page is general information, not tax advice. Tax law is complicated and your situation is your own. Talk to a qualified tax professional before making any decision based on credits or deductions described here.
The 30% Residential Credit Has Expired
For years, homeowners who bought a rooftop solar system could claim the federal Residential Clean Energy Credit (Section 25D) — worth 30% of the system's cost — on their federal taxes. That credit expired for homeowner-owned systems placed in service after December 31, 2025.
In plain terms: if you buy a residential solar system that goes into service in 2026 or later, the direct federal tax credit for that purchase is 0% — unless Congress passes new legislation. This is the current law, and any solar company still advertising the 30% homeowner credit as available for new 2026 installations is describing an expired program.
The Lease and PPA Path Is Still Open
There is a meaningful exception. When a third party owns the system on your roof — through a solar lease or a power purchase agreement (PPA) — the system may still qualify under a different provision, Section 48E, through 2027. The credit goes to the system owner (the leasing company), which typically passes part of the value through to you in the form of lower lease or PPA payments.
This is one reason leases and PPAs deserve a fresh look in 2026: they are one of the few remaining channels for federal solar incentives on homes. Read our leasing vs. buying comparison to understand the trade-offs honestly.
Commercial Systems Are Treated Separately
Businesses and investment properties fall under the commercial federal solar tax credit (Section 48E) — currently 30% of project cost for systems that meet prevailing-wage and apprenticeship requirements (6% without). Under current law, the credit is available only for projects that begin construction on or before July 4, 2026, or are placed in service by December 31, 2027; projects that miss both deadlines get 0%. Standalone energy storage is not subject to the early sunset. If you're considering solar for a commercial building, parking canopy, or solar farm, the incentive landscape is very different from the residential one — and the clock is ticking. See our commercial solar services for what's possible.
What Texas Adds (and Doesn't)
- No state income tax, no state credit. Texas has no state income tax, so there is no state-level income tax credit for solar to stack on top of federal incentives.
- Property-tax protection. Texas Tax Code §11.27 provides that the value added to your property by a solar device is exempt from property-tax appraisal. In general terms, going solar shouldn't raise your property-tax bill — confirm the current application with your county appraisal district or a tax professional.
- No statewide net-metering mandate. Export credits and buyback plans are set by your retail electric provider and vary widely — check your utility's current terms rather than assuming any particular arrangement.
- Local utility rebates. Some municipal utilities have offered solar rebates in the past. Always "check your utility" for current programs — amounts and availability change, and we won't quote figures we can't verify.
What to Do with This Information
- Ask any installer about the 2026 rules directly. A company that still pitches the 30% homeowner credit for a 2026 purchase hasn't updated its materials — or its honesty.
- Compare lease/PPA offers alongside purchases. With 48E still available through 2027, a lease may carry incentives a purchase no longer can.
- Get professional tax advice. Eligibility, carryforwards, and interaction with other credits depend on your tax situation. A tax professional earns their fee here.
Ready to see how the current incentive landscape applies to your home? Get My Solar Quote and we'll walk through your options — including the lease path — with the 2026 rules, not last decade's.