Solar Tax Credit by State in 2026: Funding Options Now That the 30% Credit Expired

In 2026, solar incentives in the United States have changed significantly compared to previous years. With the federal 30% solar tax credit expiring at the end of 2025, homeowners no longer have access to a single, nationwide incentive that substantially reduces upfront solar installation costs. For many, this change has altered the perceived affordability of going solar.

However, solar incentives have not disappeared. Instead, available incentives now depend on your location and the structure of local and state programs.

State tax credits, rebates, property tax exemptions, net metering policies, and solar renewable energy credits (SRECs) remain available, but their structure and impact differ across jurisdictions. Some programs lower installation costs upfront, while others provide benefits once the system is operational, such as reduced electricity bills or ongoing performance-based payments.

This distinction is important for homeowners evaluating solar in 2026. Upfront incentives can lower the initial investment, while backend programs affect monthly utility bills and overall long-term savings.

Understanding which incentives apply to your location—and how they impact costs over time—is crucial for setting realistic expectations regarding affordability, payback periods, and long-term value.

State-Specific Solar Incentives

State and local incentives generally fall into two categories, each influencing solar economics differently. Some programs reduce upfront installation costs, while others improve long-term savings by lowering electricity bills or generating ongoing income. Recognizing the difference helps homeowners set accurate expectations about payback timelines and cash flow.

State Tax Credits

Some states offer tax credits that reduce a homeowner’s state income tax liability when they install a qualifying solar energy system. These credits operate independently of federal policy and are governed by state law.

State tax credits may cover equipment, installation labor, or total project costs, depending on the program’s design. Credit values, eligibility criteria, and application processes differ by state. Some credits have a maximum dollar amount, while others are limited by annual funding or expiration dates.

Unlike rebates, tax credits typically affect taxes owed rather than the initial purchase price. That distinction matters for homeowners planning how to finance a solar project.

Net Metering

Net metering allows homeowners to receive bill credits for excess electricity their solar system sends back to the grid. When a system produces more power than the home uses, that surplus offsets future electricity consumption.

Net metering does not reduce installation costs. Instead, it functions as a long-term bill reduction mechanism. Credit rates, system size limits, and utility rules vary by state and, in many cases, by utility provider.

Because net metering affects monthly energy bills over the life of the system, it plays a major role in determining lifetime savings and payback periods.

Rebates

Rebates are typically offered by state agencies, utilities, or local governments. These programs reduce upfront costs by providing cash incentives after installation or, in some cases, at the point of sale.

Rebate programs are often limited by funding availability and may operate on a first-come, first-served basis. Availability can change quickly, making timing and verification critical. Some rebates target specific system sizes, income levels, or technologies.

Homeowners considering rebates should confirm program status and application requirements before proceeding with installation.

Solar Incentives by Operating State

Solar incentives vary significantly by location. Below is an overview of how key operating states approach solar affordability in 2026, with attention to both upfront cost relief and long-term savings mechanisms.

Maryland

Maryland continues to support residential solar through a mix of targeted programs and performance-based incentives. The Maryland Solar Access Program provides income-qualified households with incentives tied to system size. Awards are issued during defined application windows and are subject to funding limits.

In addition to direct incentives, state and local tax credits may reduce the overall cost of residential solar installations, depending on homeowner eligibility and jurisdiction. Maryland also maintains an active SREC market, allowing homeowners to earn income based on the electricity their systems generate over time.

Net metering policies credit excess solar production, helping offset electricity costs and improve long-term savings.

Virginia

Virginia approaches solar incentives primarily through tax treatment and utility policy. Certified solar energy equipment may be classified separately for taxation purposes, which can reduce property tax impacts when adopted by local ordinance.

Additional grants, rebates, and utility incentives may be available through state and regional programs, depending on system type and location. Statewide net metering supports residential solar systems by crediting excess electricity sent to the grid.

Together, property tax treatment and net metering shape the long-term financial benefit of residential solar systems in Virginia.

Washington, D.C.

Washington, D.C. relies heavily on tax relief and bill reduction programs to improve solar affordability. Property tax exemptions help reduce long-term ownership costs for qualifying solar energy systems.

The Solar for All program focuses on reducing electricity bills for income-qualified households, often through community solar participation rather than rooftop installation. Community solar subscriptions allow residents to benefit from solar generation without installing panels on their own property.

District-specific tax exemptions and bill credit programs play a central role in making solar accessible to a wider range of households.

New Jersey

New Jersey emphasizes backend savings through tax exemptions and performance-based incentives. Qualifying residential solar energy systems are exempt from property and sales taxes, preventing installations from increasing assessed home value.

The Successor Solar Incentive Program (SuSI) allows homeowners to earn payments based on solar energy production through SRECs. Because direct installation incentives are limited, ongoing SREC revenue and tax exemptions are central to solar affordability in the state.

Together, these programs support long-term cost recovery rather than immediate purchase discounts.

Pennsylvania

Pennsylvania supports residential solar primarily through net metering and SREC programs. Net metering allows homeowners to offset electricity usage with credits for excess generation, while SRECs provide income tied to system performance.

Many jurisdictions exempt qualifying solar systems from property tax assessments, preventing an added tax burden. Because upfront rebates are limited, long-term savings strategies are central to residential solar economics in Pennsylvania.

Delaware

Delaware’s Green Energy Program offers grants that can help offset installation costs for eligible customers, subject to utility participation and funding levels.

Property tax exemptions may apply depending on local policy, and net metering allows homeowners to earn bill credits for excess electricity sent to the grid. These incentives improve both upfront affordability and long-term savings when available.

Florida

Florida supports residential solar primarily through tax exemptions and utility policies. Solar energy systems are exempt from state sales tax, reducing upfront purchase costs for homeowners.

Property tax exemptions prevent solar installations from increasing assessed home value. Net metering rules determine how excess electricity generation is credited over time. Together, tax treatment and utility policy shape the financial value of residential solar systems in Florida.

How to Find and Apply for Solar Incentives in Your State

At Solar Energy World, we make it easy for you to explore solar incentive programs available in Maryland, Virginia, Washington D.C., New Jersey, Pennsylvania, Delaware, and Florida. Simply choose your state, select the award that interests you, and submit your application.

Start With State and Federal Websites

If you live outside of those states, start by using a reliable resource such as the Database of State Incentives for Renewables and Efficiency (DSIRE) or the Department of Energy (DOE).

On DSIRE’s website, select your state and explore available solar programs. Always verify the last update date to ensure the information is up to date. If a page appears outdated, follow the website link provided for the most recent details.

On the DOE’s website, navigate to the rebates page, select your state, and follow the link to your state’s energy office for further information.

Check Out Your Electric Company’s Website

Another alternative is visiting your current electric company’s website and exploring their renewable energy programs. These sites often have a list of solar incentive programs to help you get started. You can also call your electric company to speak with someone directly about making the switch to solar power.

The specific information you need when applying to tax credit, rebate, or grant programs can vary. However, in general, you’ll need:

• Your tax forms
• The size of your system in kW, along with a breakdown of the equipment needed (solar panels, wiring, hardware, inverters, etc.).
• The installation date
• Installer, or contractor, information, such as the company’s name, contact information, certification, etc.
• Proof of purchase, like bills or property tax statements
• Copies of local permits for installation and inspection approvals
• An estimate of annual energy production

Maximizing Benefits from Local Solar Programs

With fewer upfront incentives available in many states, maximizing solar value in 2026 often means focusing on long-term savings. Net metering and SREC programs can significantly improve lifetime returns when paired with thoughtful system design and financing.

Homeowners may also explore solar loans, leases, or power purchase agreements when upfront incentives are limited. Understanding local utility rate structures is critical, as rate design influences how much value solar generation provides over time.

Policy changes can affect compensation rates and program availability, so staying informed remains an important part of long-term planning.

State Grants for Low- to Moderate-Income Households

Some states prioritize income-qualified households through targeted solar programs. Maryland’s Solar Access Program and Washington, DC’s Solar for All initiative focus on reducing electricity costs for underserved communities rather than offsetting installation expenses.

Community solar plays a growing role in these efforts by allowing participants to benefit from solar savings without installing rooftop systems or taking on high upfront costs.

Ready to Explore Your Solar Options?

A localized solar assessment can help identify which incentives apply to your home and how they affect costs and savings. Speaking with a solar expert can clarify system pricing, long-term value, and available programs.Get a FREE solar estimate to start discussing your local funding options.