After the recent repeal of the 30% federal tax credit, there’s a growing concern amongst people interested in solar energy that this is the beginning of the end for solar incentives.
That’s not the case at all.
Solar financial incentives don’t just help alleviate the costs of going solar. They also raise awareness of the perks of solar energy and they contribute to the long-term socio-economic and environmental benefits of going solar. They are a crucial part of the clean energy industry and they are not going away anytime soon.
So in this article, we will explore the impact of the federal tax credit going away as well as the solar incentive options that are still available for anyone interested in going solar.
What happened to the 30% federal tax credit?
The 30% federal tax credit. It allows homeowners who decide to go solar to claim 30% of their installation costs from their federal taxes. Thanks to this groundbreaking incentive, the solar industry in the U.S has seen immense growth. We have observed growing interest in solar in markets that we serve including Pennsylvania, Delaware, Maryland, Massachusetts, New Jersey, Illinois and New York and that is primarily thanks to the federal tax credit. This is because it makes solar even more attractive for prospects since it helps lower their initial cost (which is often a deterrent for people interested in going solar). This tax credit also helped boost private investment in clean energy by creating a faster return on investment, thus encouraging developers to invest in more solar projects.
However, on July 4th, 2025, the Trump administration passed the “Big Beautiful Bill” which ended the 30% residential federal tax credit for solar owners. With this major incentive going away, future solar owners will now face higher upfront costs to go solar as well as increased rate hikes as energy demand continues to soar. So any homeowner considering solar needs to act fast to take advantage of the credit before it expires December 31, 2025.
So are solar incentives going away?
Not quite.
Yes, the federal tax credit is ending in December 2025 but solar incentives are still very much present. There are still plenty of financial incentives available to help make your transition to solar as affordable and stress-free as possible:
1. Performance based incentives: these incentives compensate you based on how efficient your system is and how much electricity it produces.
Example
- SRECs: A solar renewable energy certificate (SREC) is a financial incentive that helps homeowners make some extra cash by selling leftover energy produced by their solar panels to their utility. For example, since 1 SREC is earned for every 1 MWh or 1000 kWh, if a homeowner in Pennsylvania has a solar system that generates 6 MWh (6000 kWh) yearly, and SRECs in that state sell for $31, they could earn 6x$31= $186 in SRECs income each year.
2. State incentives and credits: these include a variety of rebates and tax credits offered at the state level to help facilitate your transition to solar energy. Tax credits help reduce your tax burden when you file your state income taxes and rebates give eligible solar owners discounts and cash refunds for their solar system.
Examples:
- The New York State Tax credit: if you reside in New York, lets you claim 25% (up to $5000) off your rooftop solar system’s installation costs.
- The Massachusetts State Tax Credit: lets you claim 15% off the cost of your solar panels (up to $1000) if you reside in Massachusetts.
- Pennsylvania PECO rebate: new solar owners in Pennsylvania are eligible to receive a $500 rebate from PECO if their system was installed after September 1, 2024.
3. State solar initiatives: these are special programs created by state governments to encourage the adoption of solar energy.
Examples:
- The New Jersey Successor Solar Incentive Program (SuSI): provides financial support to large-scale solar projects to spur the growth of solar in New Jersey and make it easier for all its residents to benefit from solar energy, no matter their background.
- The Solar Massachusetts Renewable Target (SMART) Program: Ensures a fixed rate for every kilowatt/hour of solar energy produced by a community solar project. This provides a stable revenue source for solar developers and incentivizes them to continue developing even more solar projects. It also features additional incentives specifically for developers servicing low-income communities.
- The Maryland Solar Access Program: supports income-eligible Maryland residents with the installation costs of their solar photovoltaic system. The program offers grants of $750 per kW (up to $7500) to help low-to-moderate income households go solar.
Keep in mind that financial incentives will also still be available to third party owners of solar systems (e.g. purchase power agreements providers). Solar battery incentives like California’s Self-Generation Incentive Program are also still available. These can help you as a solar owner, recoup part of the cost of your solar battery system (if you have one), as well as your solar panels.
4. Net metering, property and sales tax exemptions
Many states like Massachusetts and New York also offer solar equipment sales tax exemptions as well as property tax exemptions on the value added to your home from solar panels.
Net metering is also a well-known incentive amongst solar owners. This billing system gives you credits for any extra energy produced by your solar panels that you send back to the grid. The earned credits can later be used to reduce your electric bill at times when your system underproduces (ex: during winter months).
Of course, check with your utility or local government to understand exactly which incentives you could qualify for.
Yes, the 30% federal tax credit is ending but there are still plenty of financial incentives available to help soften the costs of going solar. If you are ready to act now, reach out to our team and we will help you find the right solar energy solution for your needs!