Massachusetts
Estimated payback: 7 to 9 years
- SMART 3.0: $0.03/kWh for 10 years
- $1,000 state income tax credit
- Full retail net metering at 30+ cents/kWh
- ConnectedSolutions battery income: $1,000 to $1,500/year
The 30% federal residential solar credit ended December 31, 2025. Here is what that actually means for homeowners deciding whether solar still makes financial sense in 2026, and which states still offer compelling economics without federal help.
By the Solar Installers Near Me Team • Published
Quick answer
Solar remains financially worthwhile in 2026 for homeowners in high-electricity-rate states with functioning production incentives, particularly Massachusetts, Rhode Island, New Jersey, New York, and Illinois, where estimated payback periods still fall in the 6 to 10 year range without any federal residential credit. In low-rate states without meaningful state programs, payback periods now stretch to 15 to 19 years. The Section 25D residential credit expired December 31, 2025 under H.R.1, signed July 4, 2025. There is no federal residential solar credit in 2026.
Key facts
The 30% federal residential solar credit (Section 25D) ended December 31, 2025. H.R.1 (OBBBA), signed July 4, 2025, terminated it.
Massachusetts, New York, New Jersey, Maryland, and Illinois have state incentives strong enough to keep solar financially competitive without federal help.
Leases and PPAs allow third-party solar companies to claim the Section 48E commercial credit. Construction must begin by July 4, 2026 for that full-credit window.
In low-rate states without state programs, payback is now 15 to 19 years. Honest expectation-setting is required there.
Dealer fees on solar loans typically run 19 to 35 percent of system cost. Ask every installer to show this as a dollar line item before you sign.
The 2026 reality
The One Big Beautiful Bill Act, signed into law on July 4, 2025 (Public Law 119-21), terminated the Section 25D Residential Clean Energy Credit for solar systems placed in service on or after January 1, 2026. The law contains no phase-down and no grandfathering for contracts signed before the deadline. A system installed in January 2026 receives zero federal residential credit even if a contract was signed in September 2025.
If you installed solar before December 31, 2025, any unused portion of the credit carries forward. That carryforward applies only to pre-2026 installations; it does not apply to 2026 systems.
Three programs survived the legislation intact. First, the commercial credit under Section 48E remains active. Commercial projects where construction begins by July 4, 2026 can still claim the 30 percent base credit with a full placed-in-service window through December 31, 2030. Second, state solar incentive programs are entirely separate from federal law and unaffected by H.R.1. Third, lease and PPA structures create a path for homeowners to benefit indirectly from the commercial credit through lower monthly rates.
Where solar still works well
State programs, high electricity rates, and functioning net-metering rules are the lever now. These five states have the strongest combination of those factors. All payback estimates below assume zero federal residential credit.
Massachusetts
Estimated payback: 7 to 9 years
New York
Estimated payback: 7 to 10 years
New Jersey
Estimated payback: 7 to 9 years
Maryland
Estimated payback: 8 to 11 years
Illinois
Estimated payback: 8 to 11 years
Not in one of these five states?
We cover all 50 states. Each state page shows the actual utility rates, net-metering rules, and available state incentives for your specific market.
Browse all state guidesThe path to federal value
When a solar company owns the equipment under a lease or PPA, that company can claim the Section 48E commercial credit. If construction begins by July 4, 2026, the company may pass a portion of those savings to you through lower monthly rates. You do not receive the credit yourself, but you benefit indirectly from it. This is the only mechanism by which a homeowner in 2026 benefits from a federal solar tax program.
Commercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
Ask About Lease and PPA Options| Category | Option | Who Owns the System | Federal Credit Access in 2026 | Dealer Fee Risk (dollar amount disclosed) | Best For |
|---|---|---|---|---|---|
| Cash purchase | Cash | You | None. Section 25D expired Dec 31, 2025. | None (no loan) | Fastest payback, no financing cost, full ownership. |
| Solar loan | Loan | You | None. Residential credit expired. | High risk: 19 to 35% of system cost. Ask for dollar amount. | Full ownership without upfront cash. Verify dealer fee before signing. |
| Solar lease | Lease | Solar company | Indirect: company claims 48E, may pass savings through lower monthly rate. Construction must begin by July 4, 2026. | N/A (no loan) | Low upfront cost. Access to federal value indirectly. Review escalator clause. |
| Power Purchase Agreement (PPA) | PPA | Solar company | Indirect: same 48E pass-through as lease. Construction deadline applies. | N/A (no loan) | Pay only for what you produce. State legality varies -- verify your state. |
Before you sign
State averages mask enormous variation. In Missouri, Evergy customers get full retail net metering and Ameren customers do not. In Michigan, DTE Solar Currents participants receive substantially better economics than the standard net billing terms. Your utility territory matters more than the state average. Ask the installer to run your specific utility and zip code.
An installer who quotes payback assuming a 30 percent federal credit is quoting 2024 numbers on a 2026 purchase. Ask them to re-run the calculation with zero federal residential credit. The resulting payback period is the real 2026 number. Any installer who cannot or will not run that scenario is not giving you accurate information.
Dealer fees on solar loans typically run 19 to 35 percent of system cost and are rolled into the loan principal without a separate line item. On a $30,000 system, a 25 percent fee adds $7,500 to what you owe. Ask for the dealer fee in dollars, not as a percentage of the interest rate or a vague "financing cost." If the installer cannot or will not disclose it, consider that a signal.
Why no door-knocker, no commission, no shared lead matters in 2026
The consumer-protection case for working with an independent advisor is stronger in 2026 than it was in 2024. The American Prospect and Grist documented the door-knocker crisis. The CFPB complaint data shows a roughly 500 percent growth in solar complaints since 2019.
Why we never knockGet the specific numbers for your address, utility, and situation.
A free in-home assessment walks through your actual bill, your roof, your utility's net-metering rules, and every incentive that applies to your zip code. No shared lead. No commission. No pressure.
Q and A
Direct answers. No redirect to a sales call before explaining the basics.
A free in-home assessment takes about 90 minutes. An independent advisor reviews your utility bills, your roof, your utility's net-metering rules, and the specific state incentives for your zip code. No door-knockers. No commissions. No shared leads.