Is There Still a Federal Tax Credit for Solar Panels?
What changed, when and who changed it
Congress set the end date in Public Law 119-21, dated July 4, 2025. The IRS explained it on August 21, 2025, in fact sheet FS-2025-05. The credit also covered solar water heaters, wind turbines, geothermal heat pumps, fuel cells and battery storage, so the same date matters for those.
The timing trap
The IRS says an expenditure counts as made when the original installation is completed. If you paid in 2025 and the work finished in 2026, the IRS treats the expenditure as made in 2026, and the credit is lost.
Who says what
- IRS FAQ, August 21, 2025: not allowed for expenditures made after December 31, 2025.
- IRS credit page, updated July 4, 2026: covers property installed from 2022 through December 31, 2025, and isn't available for property placed in service after December 31, 2025. The same page still mentions a phase-out beginning in 2033, which doesn't fit that cutoff.
- ENERGY STAR federal tax credits page, no updated date shown: covers newly installed property from 2022 through 2025.
What this means for you
Be careful with any solar or battery sales pitch that counts a federal credit in its savings. Ask the seller to show the IRS page behind the claim and to run the numbers without the credit. This page isn't tax advice, so ask a tax professional before you decide, especially if your project straddled the end of 2025.
What isn't settled
The IRS wording varies between pages, as shown above. The IRS credit page says excess unused credit can be carried forward to future years, so ask a tax professional how that applies to you.
Common questions
Can I still claim a geothermal heat pump?
I paid a deposit in 2025. Does that count?
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Last verified 2026-11-04
- IRS: FAQs on changes to sections 25C, 25D and others under Public Law 119-21 (FS-2025-05, Aug. 21, 2025) — 25D is not allowed for expenditures made after December 31, 2025; an expenditure counts as made when original installation is completed.
- IRS: Residential Clean Energy Credit (page updated July 4, 2026) — Property covered; installed from 2022 through December 31, 2025; not available for property placed in service after December 31, 2025; unused credit can carry forward; still mentions a phase-out in 2033.
- ENERGY STAR: Federal tax credits — Says the Residential Clean Energy credit covers newly installed property from 2022 through 2025.
General information, not professional advice. Conditions, codes and prices vary. Turn off power, gas or water before any work, and hire a licensed professional when in doubt. Cost figures are our estimates, not quotes.