Home / Solar Incentive Changes 2026–2027
Data last verified: August 2026Solar Incentive Changes 2026–2027
Direct answer
2026 is the biggest reset in U.S. residential solar economics in a decade: the federal 25D credit expired Dec 31, 2025, leaving state programs as the deciding factor. Key 2026–27 changes: New Jersey’s SuSI SREC-II steps down for registrations on/after July 27, 2026; Massachusetts is running SMART 3.0; Connecticut moved new residential solar to a state-designed successor tariff; and California’s property-tax exclusion sunsets Jan 1, 2027 — a system must be operating before then to lock it in. The commercial 48E credit (30%) survives for leased/PPA systems. Sources: NJ Clean Energy, Mass.gov, DSIRE (retrieved Aug 2026).
The 2026 federal reset
| Item | 2025 | 2026 |
|---|---|---|
| Federal residential credit (25D) | 30% | $0 — expired Dec 31, 2025 (OBBBA P.L. 119-21) |
| Federal commercial credit (48E) | 30% | 30% — claimed by lease/PPA owner; new domestic-content and foreign-entity (FEOC) rules apply to 2026 construction |
| Typical installed cost | ~$2.70–3.60/W | ~$2.70–3.60/W (2026 national average) |
State incentive changes (2026–2027)
| State | Program | 2026–27 change |
|---|---|---|
| New Jersey | SuSI (SREC-II) | Residential SREC-II value steps down for registrations on or after July 27, 2026 (NJ Clean Energy) |
| Massachusetts | SMART 3.0 | Active and accepting residential applications in 2026 (Mass.gov); performance payments ~$0.03/kWh × 20 years + SREC-II |
| Connecticut | Successor tariff | New residential solar moved from retail net metering to a state-designed successor tariff; value depends on utility |
| California | Property-tax exclusion (§ 73) | Sunsets Jan 1, 2027 — system must be operational before then to lock in the assessment exemption; SGIP general tier waitlisted, income-qualified open |
| New York | NY-Sun | ~$1/kW block incentives continuing; state credit up to 25% (capped $5,000) for qualifying |
| South Carolina | State credit | 25% up to $3,500 state income-tax credit continues |
| Arizona | State credit | 25% up to $1,000 continues (no cap change) |
| Illinois | SREC market | ~$150/kW SREC income; adjuster schedules reviewed annually |
| Texas / Florida | Property-tax exemptions | No income-tax credit (neither has state income tax); property-tax exemption on added value (~$15,000–25,000 protected) is the meaningful 2026 incentive |
What still works in 2026 (when the credit is gone)
- Lease / PPA with 48E: the company claims 30% and prices it into your payments — now the only federal path, and the reason a lease can beat a purchase for some households.
- Net metering where it survives: near-retail credits still apply in MA, upstate NY (National Grid), NJ (PSE&G), PA (PECO) — check the timeline.
- Performance incentives: MA SMART 3.0, NJ SREC-II, IL SRECs pay over years as your system produces.
- Property & sales tax exemptions: many states exempt the added value and equipment tax — a permanent, often-overlooked saving (CA sunsets its exemption Jan 1, 2027 — act before then).
Disclaimer: State programs change frequently and budgets close. Figures retrieved Aug 2026 from NJ Clean Energy, Mass.gov, DSIRE, and state agencies. Always verify current terms before signing — see your state guide or the 2026 incentives guide.