Are Solar Tax Credits Gone for Good? And What Is Replacing Them

Energy costs are going up. Oil prices are unpredictable. Demand is increasing with things like AI data centers. In some areas, even resource constraints are affecting how energy is produced.

So people are asking a simple question.

Does solar still make sense, and are the tax credits still available?

If you would like to listen instead, here is the link to the podcast: Episode 162

What Changed with Solar Tax Credits

Up through 2025, the answer was straightforward.

You install solar on your personal residence and you get a 30 percent tax credit.

• Ten thousand dollar system equals a three thousand dollar credit
• One hundred thousand dollar system equals a thirty thousand dollar credit

That credit reduced your tax liability directly. In many cases, it created large refunds. But that changed.

The solar tax credit for personal residences expired at the end of 2025, with a short extension into early 2026 for projects already underway.  So if you are planning to install solar now, that personal tax credit is no longer available.

If someone is telling you today that you will get a 30 percent tax credit on a new residential solar install, that is not accurate under current law.

Is Solar Still Worth It

This is where things shift. The incentive did not disappear. It moved. We are seeing more companies use something called a Power Purchase Agreement, or PPA.

Here is how it works.

• A company installs the solar system on your home
• They own and maintain the system
• They receive the tax credits
• You buy the power from them at a reduced rate

So instead of getting a large upfront tax benefit, you get lower ongoing energy costs.

Pros and Cons

Pros:

• No large upfront investment
• Lower monthly utility costs
• Maintenance handled by the provider

Cons:

• You do not receive the tax credit
• You do not own the system
• Contracts can be long term

So this becomes less of a tax play and more of a cash flow decision.

What Happens Next

Solar demand is not going away. If anything, it is increasing.

What we will likely see:

• More companies adopting PPA models
• More creative financing options
• Possible future legislation bringing back incentives in a different form

Because the core issue is still there. Energy demand is rising, and costs are not going down.

Final Thoughts

Solar is still relevant.

The tax strategy just changed. The question is no longer what tax credit you will get.

The question is whether the structure reduces your long term energy costs in a way that makes sense for you.

And as always, structure matters just as much as the strategy.