Pennsylvania
What Pennsylvania lists for home solar, and who owns the credits a net-metered system earns.
Federal solar tax credit for homeowners: what ended and what is left
As of 9 Oct 2026, the federal tax credit for home solar has ended for installations completed after 31 December 2025. The Internal Revenue Service (IRS) says the 30% Residential Clean Energy Credit is not available for property placed in service after that date. Unused credit from an earlier installation can still be carried forward.
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026); IRS, FAQ 7 in Fact Sheet FS-2025-05 (21 Aug 2025); 26 U.S.C. 25D(h), as amended by Public Law 119-21, section 70506 (4 Jul 2025). Checked 9 Oct 2026.
The credit ended for installations completed after this date.
The credit equaled 30% of eligible costs
- 2022
- 2023
- 2024
- 2025
- For property placed in service after that date
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026). Checked 9 Oct 2026.
In this guide
A page or a quote written before 2026 was written while this credit still existed, so check its date before you trust its numbers.
My Solar Brokers is a comparison website that connects homeowners in Pennsylvania and New Jersey with installer partners. We do not install solar.
What exactly ended on 31 December 2025?
Under tax code section 25D(h), the Residential Clean Energy Credit does not apply to expenditures made after 31 December 2025. It was a federal income tax credit equal to 30% of the costs of new, eligible clean energy property for your home, such as solar electric panels.
The IRS says it covered installations from 2022 through 31 December 2025. Congress ended it in section 70506 of Public Law 119-21, commonly called the One Big Beautiful Bill Act, signed on 4 July 2025. Before that law, the credit was set to run through 2034, stepping down to 26% in 2033 and 22% in 2034.
- Expenditure made
- The date the law counts a cost as spent. Under section 25D of the tax code, that is when the original installation is completed, not when you sign or pay. For a new or rebuilt home, it is when you first use the home.
- Nonrefundable credit
- A credit that lowers your tax to zero but never pays you a refund. The IRS says the amount you receive can’t exceed the amount you owe in tax.
- Carryforward
- The part of a credit your tax bill could not use in one year, applied against your tax in a later year.
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026); Public Law 119-21, section 70506 (4 Jul 2025); 26 U.S.C. 25D(e)(8)(A) and (h); IRS, Publication 5968 (revision 5-2024; cited for the old step-down schedule only). Checked 9 Oct 2026.
Which date counts: signing, paying or finishing the installation?
Under section 25D of the tax code, the day your installation is completed counts, not the day you signed or paid. The statute treats an expenditure as made when the original installation of the item is completed.
- Date allows it Installation completed on or before 31 December 2025
- Not eligible Paid in full by 31 December 2025, installation completed in 2026
The IRS answers the common case in its frequently asked questions (FAQ). Asked whether a credit can be claimed for property installed after 31 December 2025 if the taxpayer paid on or before that date, it answers no. The Congressional Research Service (CRS) gives the plain version: equipment whose installation starts in 2025 and finishes in 2026 does not count for the credit.
For a new or rebuilt home, the date is when you first use the home. If your installation finished close to the deadline, find the completion date in your installer’s paperwork.
Source: IRS, FAQ 7 in Fact Sheet FS-2025-05 (21 Aug 2025); 26 U.S.C. 25D(e)(8); CRS, “Expiration and Carryforward Rules for the Residential Clean Energy Credit” (25 Sep 2025). Checked 9 Oct 2026.
Which situations did the credit cover?
Two questions sort most rows: was the installation completed by 31 December 2025, and does the taxpayer own the system?
| Situation | Federal credit | Why |
|---|---|---|
| Installation completed on or before 31 December 2025 | Date allows it | The IRS says to claim the credit for the tax year the property is installed, not merely purchased. The home and the property must also meet the credit’s other rules. |
| Signed or paid in full by 31 December 2025, installation completed in 2026 | Not eligible | The IRS FAQ and the statute count the date installation is completed, not the date of signing or payment. |
| New or rebuilt home you first use after 31 December 2025 | Not eligible | For construction or reconstruction, the expenditure is made when your original use of the structure begins. |
| Battery storage completed for your home after 31 December 2025 | Not eligible | The IRS lists battery storage technology among the property the same credit covered, so the same last date applies. |
| Used panels already on a home you buy | Not eligible | The IRS says used (previously owned) clean energy property is not eligible. |
| Credit left over from an earlier installation | Carries forward | The IRS says unused credit can be carried forward to reduce tax in future years. |
| Lease or power purchase agreement (PPA) | Not yours to claim | The IRS says the installation must be owned, not rented or leased, by the taxpayer who claims the credit. |
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026); IRS, FAQ 7 in Fact Sheet FS-2025-05 (21 Aug 2025); 26 U.S.C. 25D(a)(6), (e)(8) and (h); IRS, Publication 5968 (revision 5-2024; cited for the ownership sentence only). Checked 9 Oct 2026.
What is left for anyone who installed by 31 December 2025?
If your installation was completed by 31 December 2025, the IRS says to claim the credit on Form 5695 for the tax year of installation. Because the credit is nonrefundable, any amount your tax could not use carries forward.
The CRS says a carryforward stays usable until the whole credit is used, and that the 2025 law did not change the carryforward rules. Form 5695 for 2025 has line 12 for a carryforward from 2024 and line 16 for the amount carried to 2026.
- Line 12
- Credit carryforward from 2024
- Line 16
- Credit carried to 2026
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026); CRS, “Expiration and Carryforward Rules for the Residential Clean Energy Credit” (25 Sep 2025); IRS, Instructions for Form 5695 (2025) (22 Jan 2026) and Form 5695 (2025), lines 12 and 16; 26 U.S.C. 25D(c). Checked 9 Oct 2026.
What about a lease or a power purchase agreement (PPA)?
A customer who leases a system or signs a PPA does not claim the homeowner credit. The IRS says the installation must be owned, not rented or leased, by the taxpayer who claims it.
The Federal Trade Commission (FTC) says the same: with a lease or a PPA you don’t own the system, so the tax credits go to its owner.
Source: IRS, Publication 5968 (revision 5-2024; cited for the ownership sentence only); FTC, “Solar Power for Your Home” (April 2022; cited for system ownership only). Checked 9 Oct 2026.
What should you ask when a quote mentions a federal credit?
Ask which credit the quote subtracts and when installation will be completed. The IRS says the homeowner credit is not available for property placed in service after 31 December 2025. Put the questions to every installer, in writing.
The Treasury Department’s advisory poses two questions about any credit a salesperson mentions: are you really eligible, and is it already in the total cost the installer or lender shows?
- Which federal credit the quote subtracts, and the rule that allows it
- The date installation will be completed, written in the quote or the contract
- The total before any credit or rebate is subtracted
- Whether the monthly payment or a “net cost” assumes a credit, and what changes if the credit does not arrive
- Who claims each incentive the quote mentions, you or the company
- Which state, utility or city programs the quote assumes, and the agency that publishes each
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026); U.S. Department of the Treasury, “Before You Purchase and Finance Solar Panels” (undated; announced 7 Aug 2024). Checked 9 Oct 2026.
Worked example with made-up numbers
Two short examples show how a credit line changes a quote and how a carryforward works. Every number is made up for practice. None is a real quote, a real tax return or a guide to what any installer charges or any household owes.
Example 1: a 2026 quote that subtracts a credit
A made-up quote for an installation to be completed in 2026 shows a total of $20,000, a line for a 30% federal credit and a “net cost” below it.
| Line | As written on the quote | With the credit line removed |
|---|---|---|
| Total before any credit | $20,000 | $20,000 |
| Less 30% federal credit (30% × $20,000) | −$6,000 | $0 |
| “Net cost” | $14,000 | $20,000 |
The $14,000 depends on a credit the IRS says is not available for an installation completed in 2026. The number to compare with other quotes is the total before any credit.
Example 2: a carryforward across two tax years
A made-up system is completed on 20 November 2025 with $20,000 of eligible costs, so the credit is 30% × $20,000 = $6,000. The homeowner owes $4,500 of tax before credits for 2025 and $5,000 for 2026.
| Tax year | Tax before the credit | Credit used | Credit left to carry forward | Tax after the credit |
|---|---|---|---|---|
| 2025 | $4,500 | $4,500 | $1,500 | $0 |
| 2026 | $5,000 | $1,500 | $0 | $3,500 |
For 2025, $6,000 − $4,500 = $1,500 is left over and carried to 2026. For 2026, $5,000 − $1,500 = $3,500.
Where do state and utility incentives come in?
What else applies depends on your state and your utility, so each market has its own page. The Treasury Department’s advisory says some states have incentive programs or rebates and suggests contacting your state’s environmental agency or energy office before you sign.
New Jersey
New Jersey’s solar incentive, how its credits are registered and who holds them.
Source: U.S. Department of the Treasury, “Before You Purchase and Finance Solar Panels” (undated; announced 7 Aug 2024). Checked 9 Oct 2026.
Questions about the federal solar tax credit
Is there a federal solar tax credit in 2026?
Not the homeowner credit. The IRS says the Residential Clean Energy Credit is not available for property placed in service after 31 December 2025. Unused credit from an earlier installation can still be carried forward.
Does a deposit paid in 2025 count?
Not if the installation is completed in 2026. The IRS says an expenditure is treated as made when the original installation is completed, so the payment date does not decide it.
What if an installer says the federal credit is still available?
Ask which credit, under which rule, and get the answer in writing. The Treasury Department advises being wary of anyone who says you can use tax credits to reduce the cost of the panels without confirming your eligibility.
Did the credit for home batteries end too?
Yes. Battery storage technology of at least 3 kilowatt-hours (kWh) was part of the same credit, so it has the same last day.
Source: IRS, “Residential Clean Energy Credit” (page updated 4 Jul 2026); IRS, FAQ 7 in Fact Sheet FS-2025-05 (21 Aug 2025); 26 U.S.C. 25D(a)(6), (d)(6) and (h); Treasury, “Before You Purchase and Finance Solar Panels” (undated; announced 7 Aug 2024). Checked 9 Oct 2026.
Find your market’s rules
Federal rules are only the start. Each market has its own rules for incentives and for the power you send back.
The IRS forms and instructions decide how the credit applies to a tax return, and your own quote and contract decide the rest.
Sources
Each source was checked on 9 Oct 2026. Undated pages are marked.
- Internal Revenue Service, Residential Clean Energy Credit (page updated 4 Jul 2026).
- Internal Revenue Service, FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21, Fact Sheet FS-2025-05, FAQ 7 (21 Aug 2025).
- Legal Information Institute, Cornell Law School, 26 U.S. Code section 25D, Residential clean energy credit, subsections (a)(6), (c), (d)(6), (e)(8) and (h), as amended by Public Law 119-21 (4 Jul 2025).
- Public Law 119-21, 139 Stat. 72, enrolled text at GovInfo, section 70506, termination of residential clean energy credit (4 Jul 2025).
- Internal Revenue Service, Instructions for Form 5695 (2025), Residential Energy Credits (22 Jan 2026), and Form 5695 (2025).
- Internal Revenue Service, Publication 5968, Important Information for Consumers: Residential Clean Energy Credit (25D) (revision 5-2024; cited for the ownership sentence and the old step-down schedule only).
- Congressional Research Service, Expiration and Carryforward Rules for the Residential Clean Energy Credit, Insight IN12611 (25 Sep 2025).
- Federal Trade Commission, Solar Power for Your Home (April 2022; cited for system ownership only).
- U.S. Department of the Treasury, Consumer Advisory, Before You Purchase and Finance Solar Panels (undated; announced in the Treasury, CFPB and FTC release of 7 Aug 2024).