Is the Federal Solar Tax Credit Gone? What NY Homeowners Need to Know in 2026

Short answer: for homeowners who buy their solar system, yes — the 30% federal solar tax credit ended on December 31, 2025. But that's not the whole story, and it doesn't mean solar stopped making sense in New York. Here's what actually changed and what it means for your home.

What actually went away

The credit everyone knew as the federal solar tax credit was the Residential Clean Energy Credit (Section 25D). It gave homeowners 30% of their system cost back as a federal tax credit. As of January 1, 2026, that credit is no longer available for systems you buy with cash or a loan. If you own the panels, you can't claim the 30% anymore.

The exception that still works: leases and PPAs

There's an important workaround still in play. When you go solar through a lease or a power purchase agreement (PPA) — where a solar company owns the equipment and you simply pay for the power it produces — the federal incentive still exists on the company's side (under Section 48E, currently through 2027). That company can pass those savings on to you as lower monthly payments and $0-down options.

In plain terms: buying solar in 2026 lost a big incentive, but third-party-owned solar can still deliver strong savings without the upfront cost. Which path is better now depends entirely on your situation — and that's a bigger question than it was a year ago.

Does this mean solar isn't worth it in New York? Not at all.

New York remains one of the most incentive-friendly states in the country, and none of these went away with the federal change:

• NY State solar tax credit — 25% of your system cost, up to $5,000, statewide.

• NYC property tax abatement — 30% over four years for Brooklyn & Queens homeowners.

• NY-Sun rebates — up-front, per-watt incentives in Con Edison territory (Brooklyn & Queens).

• Net metering — credit for the excess power your panels send back to the grid.

Stack those together and solar can still pay off nicely across Long Island, Brooklyn, and Queens — the math just looks different than the old "30% federal + everything else" pitch you'll still see on outdated websites.

What you should actually do now

The federal change makes one thing more important than ever: getting an honest, personalized look at your numbers before you commit. Buying vs. leasing now lead to very different outcomes, and the right answer depends on your roof, your tax situation, your utility, and your goals.

As an independent solar energy consultant, The Lighthouse Movement isn't tied to a single installer or financing product. We look at your real bill and your real home, walk you through both the buy and the lease math, and match you with the best-fit installer for your situation. If it doesn't make sense for you, we'll tell you.

Get a straight answer for your home

Curious whether solar still works for you after the 2026 changes? Book a free, no-pressure consultation and we'll give you the honest numbers for your Long Island, Brooklyn, or Queens home.

📞 Call (631) 697-3006 or book your free solar consultation today.

This article is for general information only and reflects incentive programs as of 2026. Incentive eligibility and tax rules change and depend on your specific situation — please confirm details with a licensed tax professional before making decisions. The Lighthouse Movement is an independent solar energy consultant, not a tax advisor.