Home › Renewable energy credits

The Residential Solar Tax Credit (§25D) Ended After 2025

Last reviewed October 26, 2026 · Educational only, not tax advice

The One Big Beautiful Bill Act amended §25D(h). The residential clean energy credit "shall not apply with respect to any expenditures made after December 31, 2025." According to IRS FAQ 7 in FS-2025-05, an expenditure counts as made when installation is completed, so paying in 2025 for a system installed in 2026 doesn't qualify.

What still applies

  • Systems completed in 2025 or earlier could claim 30% on the 2025 return (Form 5695).
  • Unused §25D credit carries forward to later years.

Alternatives for high earners

Individuals with passive income can still reduce federal tax by buying transferable commercial credits, subject to passive activity limits.

Frequently asked questions

Can I claim 25D for solar installed in 2026?

No. Expenditures are treated as made when installation is completed, and those made after Dec. 31, 2025 do not qualify.

Can I carry forward an unused 25D credit?

Yes. Excess credit from qualifying years carries forward.

Sources
  1. 26 U.S.C. §25D(h), termination
  2. IRS FS-2025-05, FAQs on OBBB changes to 25C, 25D, 45L, 179D and others
  3. IRS: Residential Clean Energy Credit (§25D)
  4. Public Law 119-21 (H.R. 1, One Big Beautiful Bill Act), Congress.gov

Owe $50k or more in federal tax?

Tell us your estimated liability and timing. We will show you what transferable credits are available and walk your CPA through the diligence.

Get a tax credit quote or call (888) 328-4718

Related guides