1. What Changed for Section 25D
From 2022 through 2025, the Residential Clean Energy Credit (Internal Revenue Code Section 25D) let homeowners claim 30% of the cost of solar panels, inverters, racking, wiring, installation labor and battery storage of 3 kWh or more as a credit against their federal income tax.
The budget reconciliation law signed on July 4, 2025 (Public Law 119-21, often called the "One Big Beautiful Bill Act") moved the credit's end date forward. The credit no longer applies to expenditures made after December 31, 2025. Before the change, it had been scheduled to run at 30% through 2032.
For a homeowner planning to charge an EV with rooftop solar, this means the federal government no longer covers part of the system cost. A $20,000 solar and battery system that cost $14,000 after the credit in 2025 now costs the full $20,000 before any state or local incentive.
2. Who Can Still Claim the Credit
If your solar or battery installation was completed on or before December 31, 2025, you can still claim the 30% credit for that system on your 2025 federal return using IRS Form 5695 (Residential Energy Credits). Keep contractor invoices, equipment specification sheets and the final inspection or permission-to-operate record that shows the completion date.
If your credit was larger than your 2025 tax liability, the unused amount can generally be carried forward to later tax years. The repeal stops new expenditures from qualifying; it does not cancel a credit you already earned.
| Federal Incentive | What It Covered | Status in 2026 |
|---|---|---|
| Section 25D Residential Clean Energy Credit | 30% of home solar, batteries ≥3 kWh, labor | Ended for systems installed after Dec 31, 2025 |
| Section 30C Alternative Fuel Refueling Property Credit | 30% of a home EV charger (up to $1,000) in eligible census tracts | Ended for chargers placed in service after Jun 30, 2026 |
| Section 30D Clean Vehicle Credit | Up to $7,500 on a new EV | Ended for vehicles acquired after Sep 30, 2025 |
| Section 25E Previously-Owned Clean Vehicle Credit | Up to $4,000 on a used EV | Ended for vehicles acquired after Sep 30, 2025 |
3. Leases, PPAs and Other Options
Section 25D only ever applied to systems a homeowner owns. With a solar lease or power purchase agreement (PPA), the installer or financing company owns the equipment and claims business energy credits under different sections of the tax code, which have their own, separate phase-out rules. Some of that value can show up as a lower monthly payment. Ask any lease or PPA provider in writing what incentive they are assuming and how it affects your price.
State, local and utility programs are now the main source of help for buying a system outright. Examples include state rebates, property tax exemptions for solar, sales tax exemptions, and utility battery or demand-response payments. The DSIRE database (dsireusa.org), run by North Carolina State University, lists current programs by ZIP code.
4. How VoltSolar Calculates Costs Now
Every estimate on VoltSolar now assumes no federal tax credit. The calculator uses an installed price of about $3.00 per watt before incentives, and the vehicle pages use a 25-year levelized cost of roughly $0.09 per kWh for rooftop solar at the US average of about 5.0 peak sun hours. Sunnier states produce more energy per panel and come out cheaper per kWh.
If you qualify for a state or utility rebate, subtract it from the estimated system cost shown in the calculator to get your own net cost and payback period.