Solar incentives come in layers, and stacking them is how homeowners cut their cost by half or more. The federal layer is gone – the 30% residential credit (Section 25D) expired on 31 December 2025 (what changed). That makes your state rebates, tax exemptions, and performance payments the entire incentive stack in 2026. Here is how the states stack up in 2026.
The Four Types of Solar Incentives
- State tax credits (the federal 30% credit expired at the end of 2025).
- Rebates (up-front cash back).
- Tax exemptions (sales and property tax waived).
- Performance payments (SRECs / net metering) (you earn for what you produce).
Top Incentive States in 2026
| State | Why it stands out | Details |
|---|---|---|
| New Jersey | One of the most valuable programs in the U.S. (SuSI / SREC-II) plus tax exemptions | NJ incentives |
| New York | Strong state tax credit, rebates, and net metering | NY incentives |
| Massachusetts | State credit, SMART program, and high electricity rates | MA incentives |
| California | Highest volume; property-tax exclusion sunsets Jan 1, 2027 | CA incentives |
How to Stack Your Incentives
- Start with your state rebate or tax credit.
- Apply any state rebate or credit.
- Confirm sales and property tax exemptions.
- Enroll in net metering or your state's SREC program.
Stacked correctly, these can cut a $21,000 system to well under $12,000 net in the strongest states.
Find Your State
- New Jersey
- New York
- Massachusetts
- California
- (more states added regularly)
FAQ
Is there still a federal solar tax credit?
Not for a cash or loan purchase. Section 25D expired 31 December 2025. Section 48E still runs through 2027, but the company that owns a leased or PPA system claims it, not you. State incentives are unaffected and still stack with each other.
Which state has the best solar incentives?
New Jersey, New York, Massachusetts, and Washington D.C. consistently rank at the top in 2026.
Do incentives expire?
Yes. The federal residential credit already expired at the end of 2025, and some state programs have their own end dates.
Related Guides
General guidance for 2026, not tax advice. Verify current rules for your state before purchasing.