Is Solar Still Worth It in 2026 Without the Tax Credit?

For years, homeowners who bought a solar system could take 30% of the cost off their federal taxes. That was the Residential Clean Energy Credit, often called 25D.

The 2025 federal tax law ended it. According to the IRS, the credit "will not be allowed for any expenditures made after December 31, 2025" (IRS FAQ). The IRS treats the expense as made "when the original installation of the item is completed," not when you signed or paid. So if your panels went up in 2026, there's no homeowner credit, even if the contract is from last year.

That's a real loss if you were planning to pay cash. The 30% you could have taken off your federal taxes in 2025 is gone for systems installed in 2026.

Two reasons: leases still carry a federal incentive, and electric rates keep going up.

Leases work differently

When you lease solar, you don't own the panels. A leasing company does, and it's the one that claims the federal credit. That's a business credit (known as 48E), not the homeowner credit, and the new law kept it for solar panels. The Solar Energy Industries Association puts it plainly: there's "no ban on third-party rented or leased solar systems" (SEIA).

The owner's credit gets built into the price you pay each month. You never touch your own tax return, and you don't need a big tax bill to benefit. The owner also has to follow new rules about where the equipment comes from, which is part of why it pays to work with an installer who keeps up with them.

Your utility isn't standing still

This is the part people tend to forget. Nationally, the U.S. Energy Information Administration expects the average home electricity price to go from 17.3¢ per kWh in 2025 to 18.2¢ in 2026, a jump of about 5% in a single year (EIA). Closer to home, the power companies have been busy:

Utility	What changed	Source
Appalachian Power (WV)	About 4% higher starting June 1, 2026. Roughly $10 more a month if you use 2,000 kWh.	WV MetroNews
Mon Power / Potomac Edison (WV)	+$3.65 a month in August 2026, then another +$4.01 in June 2027	WDTV
Duquesne Light (PA)	Default price rose from 13.75¢ to 14.14¢ per kWh in June 2026	Rate Watchdog
DTE (MI)	About +$4.23 a month starting March 2026	Michigan Advance
Appalachian Power (VA)	Asking for +$9.10 a month, plus about +$3.99 for a year, as early as March 2027 (based on 1,000 kWh a month)	Cardinal News

Figures as of September 2026.

None of these numbers is huge on its own. But they stack. A few dollars here, a few dollars there, year after year.

	Buying (cash or loan)	Lease
Upfront cost	Full price, with no 30% back	Set by your lease agreement
Federal credit	None for you	Claimed by the owner and built into your price
Monthly cost	Loan payment, or nothing if you paid cash	A lease payment set by your agreement. Ask whether it rises each year
Repairs and maintenance	On you	Included
System monitoring	Depends on the installer	Included
Best fit if...	You have the cash and plan to stay 15+ years	You would rather not make a big purchase

Buying can still pay off, especially if you have cash on hand and you're staying put for a long time. But for most of the families we talk to, the lease is the easier yes this year. You can compare every option on our financing and leasing page.

Net metering is how your utility credits you for extra power your panels send back to the grid. It matters, and it's gotten less generous in some places:

• Pennsylvania still credits extra power at the full retail rate each month. Anything left over at the end of the year (May 31) is paid out at the lower "price to compare" rate (PA Code).
• Mon Power and Potomac Edison (WV) customers who applied after December 31, 2024 get about 9.3¢ per kWh for extra power. New Appalachian Power (WV) customers get about 12.4¢ (Solar United Neighbors).
• AEP Ohio credited extra power at about 11¢ per kWh in 2025, as a bill credit rather than a check (SolarReviews).

In plain English: you want a system sized to what your house actually uses, not a giant one that ships a bunch of power back to the grid at a discount. That's why we design every system from your last 12 months of bills instead of guessing.

For leases, yes. Under current law, a solar project that didn't start construction by July 4, 2026 has to be up and running by December 31, 2027 for the owner to claim the federal credit (SEIA).

We're not going to pretend we know what lease pricing looks like after that. Nobody does yet. But permits, utility approval and installation all take time, so if you've been on the fence, now is a good time to at least get the numbers for your house.

Not every lease is built the same. Whoever you go with, get clear answers to these:

1. Is my payment fixed, or does it go up each year? Some leases include a yearly increase. Know which one you're signing.
2. Was the system sized from my actual bills? A design based on 12 months of real usage beats a guess from square footage.
3. Who pays for repairs, and what if I need a new roof? Ask who handles removing and reinstalling panels.
4. What happens if I sell my house? Find out how the transfer works and who helps the buyer through it.
5. What happens when the lease ends? Ask about your options at the end of the term.

Solar is usually worth a closer look if most of these sound like you:

• You own your home.
• Your roof gets decent sun (south, east or west-facing, without heavy shade).
• Your electric bill runs $100 a month or more.
• You're tired of watching your bill go up.
• You would like maintenance handled for you.

If that's you, answer a few questions about your home. It takes about two minutes, with no pressure and no obligation. Prefer to talk it through? Book a free consultation with our team.