For almost twenty years, the residential solar pitch leaned on one number: a federal tax credit (Section 25D, if you like the fine print) that let homeowners knock roughly 30% of a solar purchase off their taxes.
That era is over. To qualify, customer-owned systems had to be installed by December 31, 2025 — not just under contract, installed. It's why the end of last year was the busiest stretch the residential solar industry has ever had, and why the pushy "sign before the deadline!" ads finally stopped.
Here's what most homeowners haven't heard: a second federal solar credit didn't go anywhere.
The credit that survived
The tax code has always had two solar credits: one for homeowners who buy their systems, and one for businesses that own solar systems (Section 48E, formerly 48). Congress ended the homeowner version. The business version is alive — and solar companies moved fast to protect it, locking in ("safe harboring") eligibility that keeps qualifying projects credited into 2030.
Why does that matter to you? Because of a model called third-party ownership, or TPO — better known as a solar lease or PPA (power purchase agreement).
In a TPO arrangement, a solar company owns the system on your roof. You don't buy equipment; you buy the power it makes, at a rate designed to beat your utility. And because a business owns that system, the surviving federal credit still applies — the provider claims it and prices your monthly rate with that savings baked in.
The credit didn't die. It moved.
What this looks like when you get quotes
Before 2026, buying with cash or a loan usually won the math, and leases were the convenience option. That's flipped for a lot of households:
Lease / PPA: typically $0 down, the credit is embedded in your rate, and maintenance and monitoring are the provider's problem, not yours. Watch one number closely — the escalator, the percentage your rate rises each year. Look for under 3%; your utility has been outpacing that.
Prepaid lease: a newer option gaining real traction — pay the lease up front at a discount, still without owning the maintenance risk. Worth asking about if you have the cash but don't want the hassle.
Cash or loan: no federal credit anymore, but equipment prices are down sharply (panels alone fell over 20% this year), and you own the asset outright. Still the right call for some — especially if your state or utility offers its own incentives, which vary a lot.
Three questions that sort good quotes from bad ones
First: "Who owns the system, and who's claiming the tax credit?" An honest company answers in one sentence. Second: "What's my rate in year one, and what's the escalator?" Get it in writing. Third: "What happens if I sell the house?" Every reputable provider has a clean transfer process; make them walk you through it.
The deadline panic is over. What's left is a market where the incentives favor a different door than they used to — and knowing which door, before a salesperson picks it for you, is most of the game.
GRID doesn't sell solar to homeowners — GRIDcard connects homeowners with verified local solar pros who show their math.