What changed, exactly
The One Big Beautiful Bill Act (signed July 4, 2025) ended the §25D residential clean energy credit for expenditures made after 2025, and an expenditure counts as made when installation is completed. A system finished in 2026 or later gets no federal homeowner credit. If you have unused §25D credit carried forward from an earlier system, that carryforward can still be used.
The same law ended the federal home EV-charger credit after June 30, 2026, and the builder credit for new efficient homes acquired after that date.
What still exists (as of September 2026)
Leases and PPAs: the company that owns the system can still claim the §48E business credit if the solar is placed in service by December 31, 2027. That’s why our leases and PPAs can price power 20–30% below retail utility rates. Batteries are treated as storage and keep §48E eligibility much longer — through construction starting in 2033.
Colorado: solar components like panels, inverters and racking are exempt from state sales and use tax, and residential batteries are exempt from state sales tax through the end of 2032. Colorado’s 10% income-tax credit on home battery purchases runs through tax year 2026. Local sales taxes are a city-by-city question.
Utilities and cities: Xcel’s Renewable Battery Connect battery incentive reopened in May 2026, and Fort Collins Utilities offers solar and battery rebates. Programs open and close; check before counting on any of them.
Who should still buy — and who shouldn’t
Buying outright still makes sense for households with high, steady usage on a utility that credits exports at or near retail, a good unshaded roof, and a plan to stay put long enough to reach payback. Owning also avoids escalators and keeps home sales simple.
If your bill is small, your roof is shaded, or you might move in a few years, the payback on a purchased system may simply be too long now. That’s an honest reason to lease, to wait, or to skip solar. A lease or PPA may be the better fit if you want savings from month one and the federal value the owner can still capture.
What to do next
- 1Run the solar savings calculator using the full price — no federal credit for owned systems.
- 2Compare the same system as cash, loan, and lease/PPA in the financing calculator.
- 3Check your utility and city for current rebates.
- 4If you’re adding a battery, look at the Colorado battery credit deadline (tax year 2026).
FAQ
Questions we hear
If I sign a contract in 2025 but it’s installed in 2026, do I get the credit?
Under IRS guidance, the expenditure is treated as made when installation is completed, so a system completed in 2026 doesn’t qualify for §25D. Signing date doesn’t change that. Ask a tax professional about your specific case.
Is there any federal credit for home batteries I buy myself?
Not through §25D anymore. A leased battery owned by a company may still qualify for the §48E business credit, which can lower the lease price. Colorado’s own 10% battery credit is separate and runs through tax year 2026.
Will the federal credit come back?
We don’t know and won’t guess. Waiting on a possible future law means paying utility bills in the meantime, so decide on today’s numbers.
Why do some websites still say 30%?
Many pages were written before the law changed and never updated. Check the date on any incentive claim.
Does Colorado have its own solar tax credit for homeowners?
Not a general solar income-tax credit that we know of. Colorado’s benefits for solar are mainly the state sales-tax exemption on equipment; the 10% income-tax credit applies to home battery storage.