Solar · Incentives · 2026 · 22 States

Solar Incentive Stack Calculator

Select your state and system size to see available solar incentives — state tax credit, sales tax exemption, utility rebates, and SREC value (the federal §25D credit expired for purchases; lease/PPA may capture 30% via §48E) — with a total dollar breakdown and net cost.

By Alex Rivera Senior Solar Editor · Updated 2026-05-04

Quick Answer

Every U.S. for a 2026 purchase the federal §25D credit no longer applies (it expired December 31, 2025), so there is no $7,500 federal saving on a $25,000 system; a lease or PPA may still capture 30% via §48E. On top of that, states like New York (25% credit + NY-Sun rebate), Massachusetts (15% credit + SMART program), and Arizona (25% credit) stack significant additional savings. Total incentive packages vary by state, from minimal in states with no additional programs (FL, TX, GA) to substantial in top incentive states; the federal §25D credit expired for 2026 purchases, though lease/PPA systems may still capture 30% via §48E.

State Solar Incentive Calculator

State tax credit · Sales tax exemption · Utility rebates · SREC value · 22 states

Your State Incentive data from DSIRE + state revenue departments

Gross System Cost ($) Before any incentives — ~$3.00/watt installed (2026 avg)

System Size (kW) — for SREC estimate Used to estimate annual SREC production value

Utility Rebate Received ($) — optional Reduces federal credit basis (lease/PPA §48E) — enter 0 if unknown

Total Incentive Value

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Net system cost after all incentives

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Gross cost

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* SREC values are annual income estimates based on current market prices and fluctuate. Any §48E credit basis (lease/PPA) is reduced by utility rebates received; the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E). State tax credits may have income limitations — verify with a tax professional.

Data sources and methodology State tax credit rates and caps sourced from DSIRE and state revenue department publications. SREC prices based on spot market data from SRECTrade and Flett Exchange (quarterly averages). Sales tax exemptions verified against state DOR guidance. The §48E commercial credit (lease/PPA) is 30% of net cost (gross less utility rebates per IRS Notice 2013-29); the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E). This tool provides estimates; actual credits depend on taxable income, carry-forward rules, and installation timing. Consult a licensed tax professional before installation.

Solar Incentive Reference — All 22 States (2026)

State	State Tax Credit	Cap	Sales Tax Exempt	Property Tax Exempt	SREC Market	Notable Utility Program
Arizona	25%	$1,000	Yes	Yes	No	APS / SRP incentives
California	None	—	No	Partial	No	SGIP (battery storage)
Colorado	None	—	No	Yes	No	Xcel Solar*Rewards
Connecticut	None	—	Yes	Yes	ZREC	RSIP rebate program
Florida	None	—	Yes	Yes	No	Some utility rebates
Georgia	None	—	No	Partial	No	None major
Illinois	None	—	No	Yes	ABP/SREC	Illinois Shines program
Maryland	None	—	Yes	Yes	SREC-II	MEA grant up to $1,000
Massachusetts	15%	$1,000	Yes	Yes	SMART	SMART production incentive
Minnesota	None	—	No	Yes	No	Xcel Solar*Rewards MN
Nevada	None	—	Partial	Partial	No	NV Energy incentives
New Jersey	None	—	Yes	Yes	SREC-II	SREC-II market
New Mexico	10%	$6,000	Yes	Yes	No	PNM / TEP rebates
New York	25%	$5,000	Yes	Yes	VDER	NY-Sun Megawatt Block
North Carolina	None	—	No	Yes	No	Duke Energy rebates
Ohio	None	—	No	Yes	SREC	None major
Oregon	None	—	No	Yes	No	Energy Trust rebates
Pennsylvania	None	—	No	Yes	SREC	None major
South Carolina	25%	$3,500/yr×5	No	Yes	No	None major
Texas	None	—	No	Yes (§11.27)	No	Austin Energy / CPS rebates
Virginia	None	—	No	Yes	No	Dominion / APCo programs
Washington	None	—	Yes	Yes	No	Puget Sound Energy rebates

How the Federal Solar Tax Credit Works in 2026

The federal residential solar credit (§25D) expired for systems purchased after December 31, 2025 — a 2026 cash or loan purchase no longer earns it. The §48E commercial credit (30%) may still apply to leased or PPA systems, claimed by the installer. Key facts for 2026:

Rate (residential §25D): expired for systems installed after December 31, 2025. The §48E commercial credit (leased/PPA) is 30%, subject to the law's wind-down — construction before July 4, 2026 or placed in service by December 31, 2027.
Eligible costs: Solar panels, inverters, racking, wiring, battery storage (if charged by solar), installation labor, permitting fees, and inspection costs.
Credit basis reduction (§48E, lease/PPA): Where the 30% §48E credit applies to a third-party-owned system, a utility rebate or grant reduces the credit basis — e.g. a $25,000 system with a $1,500 rebate is credited on $23,500. The §25D residential credit expired for 2026 purchases.
Carry-forward: If your credit exceeds your tax liability in year 1, the unused portion carries forward to future tax years indefinitely. You cannot receive a refund — only an offset against future liability.
Claim on: the §25D residential credit (IRS Form 5695) expired for 2026 purchases; for leased/PPA systems the installer claims the §48E commercial credit (Form 3468).

Frequently Asked Questions

Can I stack the federal solar tax credit with state incentives?

Yes — most state incentives can be stacked with each other; the federal §25D credit expired for 2026 purchases, though lease/PPA systems may still capture 30% via §48E. Note: the federal §25D residential credit (Form 5695) expired for systems purchased after December 31, 2025; a lease or PPA may still capture 30% via the §48E commercial credit, claimed by the installer. State credits are claimed on your state income tax return. Note: some states require you to subtract utility rebates or grants from the system cost before calculating the state credit. Confirm your specific stack with a tax professional before installation.

What is a solar SREC and how much is it worth?

A Solar Renewable Energy Credit (SREC) represents 1 MWh (1,000 kWh) of solar energy produced. Utilities in SREC-mandated states must purchase a certain number of SRECs annually to meet renewable portfolio standards. Current SREC prices vary dramatically by state: New Jersey ~$200–250/SREC, Maryland ~$60–80/SREC, Illinois ~$50–70/SREC, Pennsylvania ~$20–40/SREC. A 10 kW system produces ~12 SRECs/year; in New Jersey that's ~$2,400–3,000/year in additional income.

Does the federal credit affect my state tax credit calculation?

In most states, no — state credits are calculated on gross system cost. Utility rebates or grants typically reduce the §48E credit basis for lease/PPA systems; the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E). Under the §48E commercial credit (lease/PPA), a $25,000 system with a $2,000 utility rebate would be credited on $23,000 = $6,900; the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E). Then apply state credit to the full $25,000 (most states). Confirm the correct order of operations with your installer and tax advisor.

What solar incentives are available in 2026?

Every U.S. no longer qualifies for the federal §25D credit on a 2026 purchase (it expired December 31, 2025); a lease or PPA may still capture 30% via §48E. On top of that, 10+ states offer state income tax credits (Arizona 25%, New York 25%, Massachusetts 15%, New Mexico 10%, South Carolina 25%). Many states exempt solar equipment from sales tax and property tax assessment increases. Several active SREC markets pay ongoing production income — NJ, MA, IL, MD, PA, OH, CT, and others. Use the calculator above for your state's complete picture.

Can I stack state and federal solar incentives?

Yes — state incentives can generally be stacked with each other; state credits are claimed on your state income tax return. The federal §25D residential credit expired for 2026 purchases, so a cash or loan purchase no longer earns it, though leased/PPA systems may still capture 30% via the §48E commercial credit. Confirm with a tax professional for your specific situation.

What is an SREC and how do I sell one?

An SREC (Solar Renewable Energy Credit) represents 1 MWh (1,000 kWh) of solar production and is separately tradeable from the electricity itself. Utilities in SREC-mandate states (NJ, PA, MD, OH, IL, CT, MA, VA, DC) must purchase SRECs to meet state renewable portfolio standards. Your solar system generates SRECs automatically — register with your state's SREC registry (e.g., PJM-GATS, NEPOOL-GIS) and sell through brokers like SRECTrade, Flett Exchange, or directly to utilities. Current prices: NJ ~$210/SREC, MD ~$70/SREC, IL ~$55/SREC, PA ~$30/SREC.

Does the solar tax credit apply to battery storage?

Yes — battery storage paired with solar may qualify for the 30% credit via §48E when third-party-owned (lease/PPA); the §25D residential credit expired for 2026 purchases. Battery rules varied by configuration; note that the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E), while lease/PPA systems may capture 30% via §48E. The Inflation Reduction Act (2022) expanded battery eligibility for the §48E commercial credit; the residential §25D credit expired for 2026 purchases (a lease or PPA may still capture 30% via §48E). Standalone battery storage may qualify for the §48E commercial credit when third-party-owned (lease/PPA); the §25D residential credit expired for 2026 purchases. Residential batteries installed standalone (without solar) are not eligible for the residential credit under §25D.

What states have the best solar incentives?

New York: 25% state credit (cap $5,000) + sales and property tax exemptions + NY-Sun rebate. Massachusetts: 15% state credit ($1,000 cap) + SMART production incentive + full exemptions. Arizona: 25% state credit ($1,000 cap) + both exemptions. New Mexico: 10% state credit ($6,000 cap) + sales tax exemption. States with no state credit (FL, TX, GA, CA, CO, VA) rely on property tax exemptions and utility programs. The federal §25D credit expired for 2026 purchases, though leased/PPA systems may still capture 30% via §48E.

Sources

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Frequently Asked Questions

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