Homeowners must secure utility approval by year-end to claim a 30% federal tax credit on solar installations.
The 30% federal solar tax credit under Section 25D of the Internal Revenue Code expires for systems installed after December 31, 2025. The OBBBA, signed July 4, 2025, eliminated the credit for post-deadline installations, requiring utility interconnection approval by year-end to qualify.
The credit allows homeowners to reduce federal tax liability dollar-for-dollar by 30% of system costs, with no cap. A $24,000 rooftop system yields a $7,200 credit, and unused portions carry forward to future years while the credit remains active. Leased systems and power purchase agreements are ineligible.
The Inflation Reduction Act of 2022 previously extended the credit at 30% through 2032, but the 2025 legislation accelerated its phase-out. Installations completed in 2026 will receive no federal credit.