There is no federal credit for a solar system you buy for your own home in 2026. The Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025, and the IRS says so in a single sentence. What is left is entirely state and utility level: net metering and production credits in Pennsylvania, a state income tax credit and a sales tax exemption in New York, and the SuSI incentive plus two exemptions in New Jersey. Here is the honest accounting for a homeowner in Milford, Port Jervis or Sussex County.
What changed, and the sentence that settles it
Section 25D covered qualified clean energy property installed at a home from 2022 through the end of 2025: solar electric, solar water heating, geothermal, wind, fuel cells, and from 2023 onward, battery storage. It is over. The IRS states it plainly on its own page for the Residential Clean Energy Credit:
The credit is not available for any property placed in service after December 31, 2025.
Internal Revenue Service
The repeal came through the One Big Beautiful Bill Act, signed July 4, 2025. Under the Inflation Reduction Act the credit had been scheduled to hold its full rate through 2032 and then step down in 2033 and 2034. It ended roughly seven years early instead.
The operative phrase is placed in service. Not signed, not permitted, not installed on the roof. A system energized in 2026 does not qualify no matter when the contract was dated.
That is the entire federal picture for a homeowner buying their own system. Everything else worth knowing happens at the state line.
Pennsylvania: what is still real
Net metering is the main event. Pennsylvania keeps retail-rate net metering for residential customer-generators under the Alternative Energy Portfolio Standards Act. The meter runs both directions, credits carry from month to month, and at the annual true-up the utility compensates any remaining unused kilowatt-hours at its price-to-compare rate. That structure lives in 52 Pa. Code section 75.13.
For a house in Milford Borough, Dingman Township or anywhere else in Pike County, the utility on the other side of that arrangement is PPL. Move west or south in our service area and it becomes Met-Ed. Which one you are on is decided by your address, not your township, and it changes both the interconnection process and the value of what you send back. We walk through that sequence in what happens between signing and switch-on.
Alternative energy credits, which most people call SRECs. Every megawatt-hour your system produces earns one credit, sold into Pennsylvania's AEPS compliance market. They are real, and on a well-sited array they are a genuine part of the value.
They are also a commodity, and the price moves. Market analysis from Power Advisory describes Pennsylvania REC prices trending down from the thirties in recent years into the low-to-mid twenties per credit, with forward markets pointing to that range holding for several more years. The Public Utility Commission's own reported weighted average price for solar AECs was 37.03 dollars per credit in the 2023/2024 reporting year and 33.20 dollars in 2024/2025 - a real drop across a single year. Different measures of different things, which is the point: this is a market, not an entitlement. If a proposal shows AEC income as a smooth fixed line for twenty-five years, ask what price was assumed.
Want to know which of these actually applies to your house? Send us the address and your utility and we will give you the state-specific version rather than the internet version.
The local wrinkle: who owns your Pennsylvania AECs
This is the part almost nobody writing about 2026 incentives followed all the way to the end, and it matters most to the customers closest to our office.
On October 24, 2025, PPL filed a distribution rate case with the Pennsylvania Public Utility Commission at docket R-2025-3057164. Inside it was a proposed tariff change that would have automatically transferred ownership of alternative energy credits from net-metered customers to PPL, replacing an arrangement under which PPL takes title only when a customer expressly rejects it after being told what the credits are worth. Eckert Seamans laid the issue out in a piece asking whether PPL's net metering customers will lose ownership of their alternative energy credits.
That question has been answered. A joint settlement filed in March 2026 was approved by the Commission on June 4, 2026, with new rates effective July 1, 2026, and the AEC transfer did not survive it. Under the approved settlement the credits remain the property of the system owner, and the settlement set a ten-year grandfathering period for a block of existing capacity. Power Advisory's review of the approved settlement walks through the result.
A separate piece of that settlement reclassifies larger customer-generators, those importing or exporting more than 100 kW, onto hourly PJM pricing. A residential rooftop system, capped at 50 kW under Pennsylvania's net metering rule, sits well below that line. FirstEnergy, which owns Met-Ed, has filed its own default service plan with a shorter grandfathering window, and that one is still being contested.
What this means for a Pike County homeowner is concrete: the answer today is favorable, and it is still worth having on paper. Ask any contractor quoting you to state in writing that the AECs in their proposal belong to you, and ask which tariff will be in effect when your system energizes.
Pennsylvania: what does not exist
Two programs come up in nearly every Pennsylvania conversation we have. Neither is available.
Solar for All is not operational. The Pennsylvania Energy Development Authority was awarded federal Solar for All money in April 2024. The legislature never authorized spending it, and EPA subsequently moved to terminate the awards nationally. DEP's own page is blunt: the program is not operational at this time, and DEP goes further, warning that homeowners should disregard communications from any solar installers claiming to be active partners in it. The Allegheny Front reported on the cancellation and how it got here.
When a state agency has to publish a warning about contractors invoking its own program, that tells you what the sales environment looks like right now.
Penn Energy Savers has not launched. Pennsylvania's share of the federal home energy rebate money, which covers efficiency and electrification rather than solar, is still not open to consumers. DEP said in May 2026 it was awaiting federal approval, and the Department of Energy issued new guidance on June 1, 2026 that DEP is now working through. DEP's rebate page is the place to watch. If you are weighing a heat pump as part of a whole home upgrade, plan as though these rebates do not exist, because today they do not.
New York: the credit that survived, and it is the best one left
If your house is in Sullivan or Orange County, you have the strongest remaining incentive in our service area.
New York's Solar Energy System Equipment Credit, under Tax Law section 606(g-1), is alive: 25 percent of your qualified solar energy system equipment expenditures, limited to a statutory cap of 5,000 dollars, for equipment installed and used at your principal residence in New York State. The details that matter, all from the instructions for Form IT-255:
- Non-refundable, but it carries forward. No refund for an unused portion, but you can carry it forward up to five years, after which any remainder expires.
- It reaches leases and PPAs. This surprises people. A written lease or power purchase agreement spanning at least ten years qualifies, and for agreements running longer than fifteen years, no credit is allowed after the fifteenth year.
- Grant-funded amounts are excluded. Expenditures paid with nontaxable federal, state or local grants do not count.
- Net metering is a condition. The system must be connected to the utility's transmission and distribution facility, and you must enter a net energy metering contract or comply with the utility's net metering schedule.
One timing caveat: the current published instructions are the 2025 tax year version. Confirm the 2026 form with your tax preparer when New York releases it.
Residential solar equipment and installation are also exempt from the 4 percent New York State sales tax and the 3/8 percent Metropolitan Commuter Transportation District tax. Local treatment varies by jurisdiction, which is why the state publishes a separate rate table in Publication 718-S, and the exemption is claimed with Form ST-121, which your installer normally handles at purchase. The state's tax bulletin has the specifics. Real Property Tax Law section 487 exempts the added assessed value for fifteen years, but municipalities may opt out, so ask your assessor before assuming it applies.
New York: the part being reported wrong
NY-Sun's Megawatt Block program is where most of the inaccurate content sits, because blocks close and articles do not get updated.
Standard-income residential incentives are closed. In the Con Edison region the residential block closed on May 29, 2025. In the Upstate region it closed on December 17, 2025. If a proposal shows you a NYSERDA per-watt rebate as a standard-income homeowner, that number needs checking against the live dashboard before you believe it.
What remains is the Affordable Solar residential incentive, a per-watt incentive for income-qualified households, which NYSERDA currently lists at 0.80 dollars per watt in the Upstate region. Read the utility restrictions carefully, because they attach to individual blocks and not to the program: the standard-income Upstate Residential Block 14 is limited to NYSEG, RG&E and National Grid service territories, and that limit is on that block. In our part of New York an address may be served by NYSEG, Orange & Rockland or Central Hudson depending on where the line runs, so check the NYSERDA Upstate dashboard for your own utility and the block you would actually land in, rather than trusting any summary, including this one, more than a month old.
New Jersey: what is still real
The SuSI program's SREC-II incentive continues. Under the Administratively Determined Incentive track, a qualifying residential net-metered system earns a fixed per-megawatt-hour payment for fifteen years, with the rate locked at registration. That rate is set administratively and steps down by block. It stepped down again in March 2026, and the Board of Public Utilities opened new Energy Year 2027 capacity for the net-metered segments on June 1, 2026. We are deliberately not printing a rate here, because whichever number we print will be wrong by the time some readers find this page. Confirm the current block rate at the New Jersey Clean Energy Program before anyone registers your system.
Full retail net metering. New Jersey maintains one-to-one net metering for residential customers, which is the backbone of the value on most north Jersey roofs.
Sales tax exemption. Solar energy equipment is exempt, claimed with an Exempt Use Certificate, Form ST-4, at the point of purchase.
Property tax exemption, with a trap in it. New Jersey exempts the added assessed value of a renewable energy system, but it is not automatic. You have to file Form CRES, the Application for Certification of Renewable Energy Systems, with your municipal tax assessor, signed by the property owner, the installer, the construction official and the assessor. It takes effect for the tax year following certification. The Division of Taxation's summary explains it. We have seen homeowners assume this happened by itself and lose a year.
New Jersey: what does not exist yet
The residential battery storage incentive is not open. Phase 1 of the Garden State Energy Storage Program has been awarded, but Phase 2, the phase that would cover behind-the-meter residential storage, has no published rules and no established incentive amount as of mid-2026. Figures for a New Jersey home battery rebate are circulating on solar marketing blogs. They are not from the Board of Public Utilities.
If storage is the reason you are considering solar, size it on your outage history and the loads that matter, the way we lay out in how we spec battery backup for outage-prone homes up here, and treat any future rebate as a bonus rather than a premise. Watch the state's clean energy program and the BPU for the actual order.
The three states side by side
| What a homeowner can use in 2026 | Pennsylvania | New York | New Jersey |
|---|---|---|---|
| Federal credit for a system you own | No | No | No |
| State income tax credit | No | Yes | No |
| Retail-rate net metering | Yes | Yes | Yes |
| Sales tax exemption on the system | No | Yes | Yes |
| Property tax exemption on added value | No | Yes | Yes |
| Ongoing per-megawatt-hour production credit | Yes | No | Yes |
| Open residential battery storage incentive | No | No | No |
| Upfront state rebate for standard-income households | No | No | No |
Every Yes above carries conditions. New York's property tax exemption depends on your municipality, and New Jersey's requires you to file for it. Read the sections above before using this table for anything.
If someone else owns the system: leases and PPAs
We sell systems you own, and we will also model a third-party option and put both in front of you. Our ownership versus PPA comparison goes through that decision in detail.
What changed federally is worth stating precisely, because this is where the most misleading sales language now lives. In third-party ownership the company that owns the equipment is the taxpayer. Any credit it claims is a business credit under Section 48E, and that is its tax position, not yours. You never personally receive a residential credit through a lease or PPA, and you did not before 2026 either.
That business credit has its own clock. Under current safe-harbor rules, projects beginning construction after July 4, 2026 must generally be placed in service by December 31, 2027 to qualify, with earlier begin-construction dates carrying longer windows. The Tax Adviser's walkthrough of the safe-harbor rules for Section 48E facilities covers the mechanics. The practical consequence for a homeowner is simple: a third-party provider's own deadlines may be driving how hard they are pushing you.
One New York point in the other direction. Because the state credit reaches leases and PPAs of at least ten years, a New York homeowner in third-party ownership may still have a state credit position that a Pennsylvania homeowner in the same arrangement does not. That is a question for your tax preparer and the actual agreement, not for a blog post.
Who this is not right for
Being straight about incentives means being straight about the projects that should not happen. Solar is probably not the right call this year if:
- Your roof has less than about ten years left. The array has to come off and go back on, and you pay that labor twice. Deal with the roof first, or do both together so the flashing details are done once.
- Your site is heavily shaded and you are not open to a ground mount. Tree canopy through Pike, Sullivan and Wayne counties is not a rounding error.
- You were counting on the federal credit to make it viable. If the project only worked with that money, the honest answer is that it may not work now.
- You are moving in two or three years. Owned systems can add value, but the timeline matters, and a transferred lease or PPA can complicate a closing.
- You are being told to sign before a deadline. Every real deadline in this post is published by a government agency and you can read it yourself. Urgency that is not traceable to one of those is a sales tactic.
What we do with all this
We build every proposal on what is in effect for your address, your state and your utility, and we mark which parts are settled and which are still in front of a commission. Where a number is a market forecast, we say so. Where a program is closed, we say it is closed, even when it costs us the job.
Our incentives page was rewritten the week the credit expired, and you are welcome to compare it against any proposal you have been handed. If you want to see the work behind the paperwork, our completed projects are the honest version.
Solar Bear Energy is a contractor, not a tax advisor. Nothing here is tax advice and none of it is an offer. Program rules, rates and tariffs described above were verified against the linked sources in July 2026 and can change without notice. Confirm your own eligibility with a qualified tax professional before relying on any credit or exemption.
What we would tell a homeowner considering this
- Any 2026 quote still built on a 30 percent federal number is either out of date or dishonest. Ask which line of the proposal it appears on.
- New York's state credit is the most valuable thing left in our service area. Pennsylvania's value is net metering and production credits. New Jersey's is the SuSI incentive plus two tax exemptions.
- PPL's attempt to take ownership of net-metering customers' alternative energy credits did not survive its rate settlement, approved June 4, 2026. The credits stay with you. Get that confirmed in writing anyway.
- Two programs people are being told to wait for, Pennsylvania Solar for All and New Jersey's residential battery incentive, are not open. Do not plan around either.
- We are contractors, not tax advisors. Confirm anything here with your own tax professional before you count on it.
