The federal residential solar tax credit expired for systems installed after December 31, 2025. That has led a lot of homeowners to assume the incentive era for solar is over. It is not. Property tax protections, utility-specific rebates, income-qualified programs, and battery incentives tied to net metering are all still active across California, Texas, Florida, and Illinois in 2026. None of them show up automatically on a sales quote the way the federal credit used to, and one of the biggest California protections is itself on a countdown. This guide covers what is still available, where to look for it, and how to claim it before you sign a contract instead of after.
Solar Incentives Still Active in 2026: Quick Reference
| Incentive Type | Still Available in 2026? | Applies In |
|---|---|---|
| Federal residential tax credit | No, expired for systems installed after 12/31/2025 | Previously all states |
| State property tax protection | Yes, but California’s is set to expire January 1, 2027 | CA, TX, FL, IL (varies by state) |
| Florida sales tax exemption | Yes | FL |
| Municipal and utility rebates | Yes, varies by provider and funding | All four states |
| Income-qualified solar programs | Yes, funding and rules vary | CA, others |
| Community solar | Yes, where available | Varies by state and utility |
| California SGIP battery rebate | Limited, mostly waitlisted for general applicants in 2026 | CA |
| Illinois Shines (SREC-based) | Yes | IL |
Is There Still a Federal Solar Tax Credit in 2026?
No, not for new residential installs. The federal Residential Clean Energy Credit, commonly called the solar tax credit or the ITC, applied only to systems installed and placed in service on or before December 31, 2025. If your system was installed and paid for before that date, you can still claim it on that year’s tax return using IRS Form 5695. If your system goes in during 2026 or later, the federal credit is not available, regardless of when you signed your contract.
- The expired credit covered qualifying battery storage costs too, so a 2025 install that included a battery could claim the credit on both.
- A separate “energy community” bonus credit existed under the same law, but it was a commercial and utility-scale add-on, not something residential homeowners claimed directly, and it ended along with the base credit.
- State and local incentives below are unaffected by the federal expiration and continue to operate under their own rules.
State Tax Protections, and Why California’s Has a Deadline
The most durable incentives left are built into how states tax solar, and they generally do not require paperwork beyond what your installer or county assessor already handles.
| State | Protection | Status |
|---|---|---|
| California | Property tax exclusion on added solar value | Active, but currently set to expire January 1, 2027 for new systems |
| Texas | Property tax exemption on added solar value | Active |
| Florida | Property tax exemption plus a sales tax exemption on equipment | Active |
| Illinois | No dedicated property tax credit; value instead comes through Illinois Shines | Active |
California’s Active Solar Energy System Exclusion has been extended before, but as of 2026 it is scheduled to sunset for systems completed after January 1, 2027. Systems installed and interconnected before that date lock in the protection; installations that slip past it will owe property tax on the added value going forward. That is a real deadline, not a formality, which is why timing matters if you are still deciding.
These are ownership-based benefits, meaning who captures them depends on whether you buy or finance the system versus lease it, a distinction covered in full in our guide to how your payment method decides who keeps each incentive.
Municipal and Utility Rebates Most Homeowners Never Check
This is the category that actually gets left on the table. Beyond state-level programs, many municipal utilities and electric cooperatives run their own solar and battery rebates, funded locally and rarely advertised beyond the utility’s own website.
- Your state’s incentive list is not the full picture if your electricity comes from a municipal utility rather than the main investor-owned provider.
- These smaller utilities set their own rebate amounts, application windows, and funding caps.
- A program can close for the year once its budget is spent, so timing matters.
- The only reliable way to know what is available is to check directly with the utility named on your bill.
Pasadena Water and Power’s solar rebate is a clear example of this pattern. It does not appear on any statewide incentive list simply because it is administered by the city utility rather than the state. For the full breakdown of California’s state-run programs, including eligibility for battery rebates and equity tiers, see our guide to government solar programs in California.
Income-Qualified and Community Solar Programs
A separate set of programs targets homeowners and renters who would otherwise be priced out of going solar entirely, and these tend to be the least advertised incentives of all.
- Income-qualified solar programs in several states cover a significant share of installation costs for households under a set income threshold, sometimes paired with no-cost weatherization work.
- Community solar lets renters, condo owners, and anyone without a roof suited to panels subscribe to a share of a shared array and receive a bill credit without installing anything at their own address.
Neither shows up in a typical sales conversation, since neither benefits the installer’s margin the way a standard system sale does, which is exactly why it is worth asking about directly.
NEM 3.0 Export Credits and the Current State of Battery Incentives
Storage is where the post-tax-credit picture gets genuinely interesting, because pairing a battery with your panels changed value even as the federal credit went away.
Net metering under NEM 3.0 reduced what California utilities pay for exporting daytime solar power to the grid, which shifted the economics toward using more of your own power directly or storing it for the evening peak instead of selling it back cheaply. That shift moved incentive value toward the battery, but the main battery rebate itself has narrowed:
- California’s Self-Generation Incentive Program (SGIP) general market funding has tightened significantly, and most new applications are now placed in the Residential Solar and Storage Equity program, largely reserved for income-qualified and high-outage-risk households, often with a waitlist.
- The property tax protection covering the added system value can still stack with whatever battery rebate you do qualify for.
- If you are deciding whether a battery is worth adding to your system in 2026, the answer increasingly comes down to your specific utility’s export rates rather than a guaranteed upfront rebate.
What This Looks Like in California, Texas, Florida, and Illinois
The exact mix depends on which of our four service states you live in, and the differences are large enough to change the math on a system.
| State | Property Tax Protection | Sales Tax Exemption | Main Extra Incentive |
|---|---|---|---|
| California | Yes, expires for new systems after 1/1/2027 | No | NEM 3.0 stacking, SGIP (limited), municipal rebates |
| Texas | Yes | No | Buyback rate varies significantly by utility |
| Florida | Yes | Yes, on equipment | Lower effective purchase price before financing |
| Illinois | No | No | Illinois Shines SREC payments over several years |
California
California combines the property tax exclusion (while it lasts), the NEM 3.0 export shift that favors battery storage, a narrowed SGIP rebate, and a long list of municipal programs like Pasadena’s. It remains the most incentive-dense of the four states, but also the one where checking your specific utility and the 2027 deadline matters most.
Texas
Texas offers a property tax exemption for the added solar value and a buyback rate for exported power that varies significantly by utility, since the state does not run a uniform statewide net metering policy. That variation makes it worth confirming your specific provider’s terms rather than assuming a statewide rule applies.
Florida
Florida pairs its property tax exemption with a sales tax exemption on equipment, lowering the effective purchase price before financing even enters the picture. Whether that is enough to make a system pencil out depends on your usage and rate, which is exactly what our guide to whether solar is worth it in Florida walks through.
Illinois
Illinois’ solar market runs on the Illinois Shines program, which pays homeowners for the renewable energy credits their system generates over a period of years rather than as a single upfront rebate. That structure makes Illinois systems behave differently in year one versus year five compared with the other three states.
Getting the Timing and Paperwork Right
Knowing a program exists does not help if you apply wrong or too late, and this is where more homeowners lose incentive money than any other step.
- Apply before you sign, not after. Several programs here, especially municipal utility rebates and income-qualified programs, require an application and sometimes a reservation of funds before installation begins.
- Do not assume a state list is complete. A municipal program can exist entirely outside the state-level incentive list a quick search turns up.
- Confirm funding status before counting on a capped program. Some, like SGIP’s general market tier, can be effectively closed to new applicants at any given time.
- Watch state deadlines, not just program eligibility. California’s property tax exclusion sunset date is a real cutoff for new systems.
Before signing, homeowners can also compare solar pricing and quote options so they can review the overall system cost alongside the incentives available to them, and comparing total system cost across states only tells part of the story if the incentive side is calculated wrong or left out.
Why Axia Solar Quote Tracks Every Program So You Do Not Have To
Every program in this guide changes over time. Funding caps reset, new municipal rebates appear, and deadlines like California’s property tax exclusion sunset approach, which is why we treat incentive research as part of the quote itself. Before we quote a system, we check what is currently active for your specific address, utility, and household situation, not just the state-level programs a generic search turns up. Homeowners who want to take the analysis a step further can also explore AI-powered solar design and estimates to understand how system design, production, and savings fit together.
What’s Actually Left Is Worth the Extra Legwork
The tax credit era made solar incentives easy to summarize in one sentence. What replaced it is more fragmented but, added up correctly, often just as valuable, spread across property tax protections, utility rebates, income-qualified programs, and a battery incentive stack that keeps shifting as NEM 3.0 and SGIP funding evolve. The homeowners who benefit most in 2026 ask what applies at their own address instead of assuming the obvious programs are the only ones available. If you want a quote that accounts for every incentive your household qualifies for, you can request a solar quote and see the full picture before you decide anything.
Frequently Asked Questions
Are there still solar incentives now that the federal tax credit is gone?
Yes. The federal residential tax credit expired for systems installed after December 31, 2025, but state property tax protections, Florida’s sales tax exemption, Illinois’ SREC program, California’s narrowed battery rebate, and a wide range of municipal utility rebates and income-qualified programs remain active. Most require you to check by address and utility rather than relying on a single national list.
Is there a California solar tax credit?
Not a state income tax credit, no. California’s main solar tax benefit is a property tax exclusion, which keeps your property taxes from rising due to the added value of a solar system, rather than a credit against income tax. That exclusion is currently set to expire for systems completed after January 1, 2027, so it applies to systems installed before that date.
Does the federal tax credit still cover solar batteries in 2026?
No. The federal credit covered qualifying battery storage costs when it was active, but only for systems installed and paid for on or before December 31, 2025. A battery installed in 2026 is not eligible for that federal credit. California’s SGIP program is the main remaining battery-specific incentive, though funding for general market applicants has narrowed significantly.
What is the energy community solar tax credit?
The energy community bonus credit was an add-on under the same federal law as the residential solar tax credit, offering an extra credit percentage for projects located in specific former fossil-fuel or high-unemployment areas. It was primarily used by commercial and utility-scale solar projects rather than individual homeowners, and it expired along with the base residential credit.
How do I find out if my utility offers a solar rebate?
Check your electric bill for the utility name and search that specific provider’s website, since municipal utilities and electric cooperatives often run rebates that do not appear on statewide incentive lists. Pasadena’s PWP rebate is a good example of a benefit that exists entirely outside the usual state-level programs most homeowners search for.
What is a community solar program and can I use one?
Community solar lets you subscribe to a share of a solar array built elsewhere and receive a bill credit for your share of its output, without installing anything on your own property. It is aimed at renters, condo owners, and anyone whose roof is not suited to panels, and availability depends on your state and utility.
Do I need to apply for solar incentives before or after installation?
Before, in most cases. Municipal utility rebates and income-qualified programs frequently require an application and fund reservation before your system goes in, and applying after installation can disqualify you entirely. Confirm the timing requirement for every program you plan to use before you sign a contract.