Federal Residential Solar Tax Credit: 2026 Rules

ByTodd Lavergne

Federal Residential Solar Tax Credit: 2026 Rules

If you own a home solar or battery system and you are reading this in 2026, here is the short version. The federal Residential Clean Energy Credit (§25D) was 30% of qualifying costs for expenditures made through December 31, 2025. Under current law, it does not apply to expenditures made after that date. Plug-in portable power stations typically do not get this credit. File Form 5695 for a year when you still had qualifying costs. This is not tax advice — confirm on IRS.gov.

Federal residential credit only. Not tax, legal, or accounting advice. Rules can change.

What changed for 2026

For a while, people planned on a long Inflation Reduction Act runway — 30% into the early 2030s, then a phase-down. Later law shortened that.

Congress amended §25D in Public Law 119-21 (July 4, 2025). The U.S. Code now says the credit “shall not apply with respect to any expenditures made after December 31, 2025.” The old 26% / 22% phase-down years were removed. The rate for property that still fell in the post–December 31, 2021 window is 30%. (26 U.S.C. §25D(g)–(h); Pub. L. 119-21 §70506; House OLRC text in effect September 4, 2026.)

The IRS matches that in plain English: 30% for new qualified clean energy property for your home from 2022 through December 31, 2025, and the credit is not available for property placed in service after December 31, 2025. (IRS Residential Clean Energy Credit page, fetched September 5, 2026.)

Form 5695’s 2025 instructions (January 22, 2026) say the same: no residential clean energy credit for expenditures after December 31, 2025; 30% for 2022–2025; unused credit can carry to 2026. (IRS Instructions for Form 5695 (2025).)

Older IRS FAQ pages and older Energy.gov posts may still show the pre-2025 IRA calendar. When pages disagree, use current §25D and the live IRS credit page.

Who could claim it

This reduced federal income tax you owed. It was not a rebate check. The IRS calls it nonrefundable: it can’t exceed your tax for the year, but unused amounts can carry forward.

In broad strokes, you could claim it for qualifying improvements tied to a U.S. home you used as a residence. Landlords who don’t live in the home can’t. Used equipment doesn’t qualify. Business-only use doesn’t; mixed use may need an allocation. Fuel cells have tighter main-home rules. (IRS Residential Clean Energy Credit page; Form 5695 instructions.)

Claim it for the year the property is installed — when the expenditure is treated as made — not merely when you paid a deposit. §25D generally treats an expenditure as made when original installation is completed. A 2025 payment with a 2026 finish does not keep a closed credit open. Confirm timing with a tax pro. (26 U.S.C. §25D(e)(8).)

What qualified

For years when the credit still applied, the IRS listed these (30% of qualifying costs; fuel cells have dollar caps):

  • Solar electric (panels)
  • Solar water heaters (with required certification)
  • Small wind
  • Geothermal heat pumps (Energy Star at purchase)
  • Fuel cells
  • Battery storage technology (IRA added this for expenditures after December 31, 2022)

Labor for onsite prep, assembly, or original installation — and piping or wiring to interconnect to the home — can count. Ordinary roof structure that only holds panels usually does not; some solar tiles/shingles that also generate power can. Utility subsidies and some rebates may reduce the cost base. No overall dollar cap except fuel-cell limits; your tax bill still caps how much you use that year. (IRS credit page; §25D; Form 5695 instructions.)

Batteries vs portable power stations

Neighbors ask whether the suitcase battery from Amazon gets the same 30% as a hardwired home battery. Under the statute and Form 5695, qualified battery storage must be installed in connection with a dwelling unit used as a residence in the United States and must have capacity of at least 3 kilowatt hours. (26 U.S.C. §25D(d)(6); Form 5695 instructions.)

Plug-in portable power stations and camping-style solar generators typically do not meet that “installed in connection with” rule. The IRS does not publish a list that blesses EcoFlow, Jackery, BLUETTI, Anker, or similar portables for §25D. Do not assume a 30% federal residential credit on a unit you roll in and plug into a wall. If an ad claims otherwise, ask for the Code cite and talk to a tax professional.

Even a stationary home battery that met the 3 kWh and install tests still needed expenditures by December 31, 2025. New homeowner-owned expenditures after that date do not get §25D under current law.

Shopping portables for outages or travel — not for a federal ITC? Size first: How Much Solar Generator Do I Need? and Best Solar Generators (2026). For hardwired backup talk, see Best Solar Generator for Home Backup — and use a licensed electrician for panel work.

How to claim

File Form 5695, Residential Energy Credits with the return for the year the property was installed. Keep invoices, proof of payment, and manufacturer certifications the instructions allow you to rely on. (IRS credit page; Form 5695 instructions.)

Installed in 2025 and filing in 2026? Use the 2025 Form 5695. Carryforward lines exist if a prior credit exceeded that year’s tax. New expenditures after December 31, 2025 do not create a new §25D credit under current law.

State credits and utility rebates are separate. They change by place and year. Check your state revenue office and DSIRE — not old blog lists.

What to do now

Installed by end of 2025? Gather docs and use Form 5695 for that year. Ask about carryforward if your tax was low.

Buying or installing in 2026 as the homeowner? Don’t bake a 30% federal residential credit into your payback sheet unless Congress and IRS change the rule again. Price on state, utility, and bill savings until a current IRS page says otherwise.

Lease or third-party ownership? Different rules — the owner may claim a commercial credit, not you on Form 5695. Read the contract.

DIY PDF plans instead of a branded suitcase? Optional, not a tax product: Energy Revolution System plans. Unrelated to §25D.

Affiliate note: the Energy Revolution System plans link may be an affiliate offer. See our affiliate disclosure. No Amazon product links on this tax page.

Sources (fetched September 5, 2026)

  • IRS — Residential Clean Energy Credit: 30% for 2022 through Dec. 31, 2025; not available after; Form 5695; batteries listed; nonrefundable with carryforward.
  • IRS — Instructions for Form 5695 (2025) / PDF (instructions dated Jan. 22, 2026): termination after Dec. 31, 2025; battery ≥3 kWh and installed in connection with your home; carryforward to 2026; Fact Sheet 2025-05 for modification FAQs.
  • 26 U.S.C. §25D (laws in effect Sept. 4, 2026): 30% after Dec. 31, 2021; terminates for expenditures after Dec. 31, 2025; battery definition; Pub. L. 119-21 §70506.
  • Older Energy.gov ITC explainers still describe the longer IRA calendar. Prefer IRS + current §25D for 2026. Later Energy.gov pages note P.L. 119-21 revised energy tax dates and point to Treasury/IRS.

Next step: If you need a portable for a fridge, CPAP, or outage kit — not a closed federal credit — go to How Much Solar Generator Do I Need?, then Best Solar Generators (2026).

Similar Posts