Tax update · Homeowners & Business Owners
The Federal Energy Credits Are Gone for 2026. Here’s What That Means.
Amanda Taraborelli, CPA · September 29, 2026
If you’re planning solar panels, a heat pump, new windows, or an EV charger and counting on a federal tax credit, stop and read this first: for 2026, those credits are gone.
The One Big Beautiful Bill Act ended most of the Inflation Reduction Act’s home energy credits years ahead of schedule. There’s no phase-down and no partial credit. The credits simply stopped.
What ended, and when
The clean vehicle credits also ended earlier, on September 30, 2025.
Timing still matters for your 2025 return
These credits turn on when the property was placed in service, not when you signed the contract or paid the invoice. A project finished in 2025 belongs on your 2025 return. A project that wasn’t up and running until 2026 gets nothing, even if you paid for it in 2025.
If you have an extended 2025 return still to file, the October 15 deadline is close. And if your 2025 solar credit was bigger than your tax bill, the unused portion carries forward to 2026.
What about Pennsylvania?
Pennsylvania doesn’t fill the gap with a state credit. There’s no Pennsylvania income tax credit and no statewide upfront rebate for residential solar. What Pennsylvania homeowners can still use are net metering, which credits you for extra power you send to the grid, and the sale of solar renewable energy credits (SRECs) if you own your system.
Check your utility. Electric companies such as PPL and PECO have run their own rebate programs for efficient equipment. Programs and amounts change, so confirm what’s open before you buy.
Income-qualified households have options. The Pennsylvania Housing Finance Agency’s Homeowners Energy Efficiency Loan Program (HEELP) offers small, low-interest loans, and the federally funded HOMES and HEAR rebate programs are run through the state. Ask the Department of Environmental Protection’s energy office whether they are open before you commit to a project. Rebates are generally not paid retroactively for work already done.
For business owners
If you build or renovate, the 45L and 179D cutoffs are worth a look at your project timeline. Homes acquired after June 30, 2026 no longer qualify for 45L, and 179D no longer applies to buildings where construction began after that date. If you already have a project underway, we can help you document when construction began.
A word of caution on sales pitches
Some solar and HVAC marketing still advertises a 30% federal credit for 2026 installs. It doesn’t exist. If a salesperson quotes you a tax credit, ask which code section they mean and get it in writing. Then call us before you sign.
Let’s talk before year-end
Thinking about an energy project, or wondering whether a 2025 credit was claimed correctly? Send us the details and we’ll sort it out.
Amanda Taraborelli, CPA
Manada Tax Service, PC