Shifting Landscape: US Federal Solar Incentives in 2026
The federal landscape for solar energy incentives is undergoing a significant transformation as 2026 approaches. While the 2022 Inflation Reduction Act (IRA) initially promised a decade of generous tax credits, subsequent legislation has dramatically altered the outlook for homeowners, businesses and non-profits considering solar investments.
The Rollback of Incentives: The One Big Beautiful Bill Act
A budget law enacted in mid-2025, officially known as the One Big Beautiful Bill Act (OBBBA), repealed or curtailed many of the consumer-facing clean energy credits originally outlined in the IRA. This means federal solar incentives in 2026 will differ substantially from initial expectations.1
Key Deadlines and Changes
- Residential Solar Tax Credit (Section 25D): The 30% income tax credit for homeowners installing solar panels or batteries expires for any expenditures after December 31, 2025.1
Impact on Energy Spending
The fiscal year 2026 appropriations law provides $3.1 billion for the Department of Energy (DOE) Office of Energy Efficiency and Renewable Energy (EERE). However, most offices within EERE are facing cuts of 15% or less from the previous year’s levels.3 Funding for wind and solar offices is slated to decrease by 27% and 31%, respectively.3 The solar program will receive $220 million, and the Wind Technologies Office will receive $100 million.3
Recent Congressional Action
Congress recently passed the Energy and Water Development (E&W) appropriations bill to fund the U.S. Department of Energy, U.S. Army Corps of Engineers and U.S. Bureau of Reclamation for fiscal year 2026.4
Planning for a Changing Landscape
The changes in federal incentives create a critical window for solar projects. Understanding these shifts is crucial for making informed decisions and maximizing any remaining benefits before they expire. The compressed timeline and new rules add complexity to going solar, requiring careful planning.
Last reviewed and updated on March 20, 2026.2