The 30% Federal Solar Tax Credit Expired — What It Really Means for New Jersey Homeowners in 2026

As I write this in late July 2026, most of New Jersey is sitting under a brutal heat dome. The PJM grid — the regional network that keeps the lights on from here to Virginia — pushed to roughly 163 gigawatts of demand this month, just shy of its all-time record set back in 2006. The U.S. Department of Energy has already issued emergency orders this summer to keep the grid from buckling, and at the peak, wholesale power prices in the Mid-Atlantic briefly spiked past $2,500 per megawatt-hour — more than 50 times what a normal day costs.

Your air conditioner has been running non-stop. You already know what that does to a July electric bill.

So this is a strange moment to write the sentence I'm about to write. But I'd rather you hear it straight from a solar guy than find out later and feel misled:

On January 1, 2026, the 30% federal solar tax credit disappeared for homeowners who buy their own system.

My name is CJ Smith. I own Solar 4 Heroes. I help homeowners across New Jersey and the East Coast go solar with $0 down. That federal credit was one of the biggest reasons people went solar for the last decade, and it's gone. I'm not going to pretend otherwise, and you should be skeptical of anyone who tries to.

But "the federal credit is gone" is not the same thing as "solar stopped making sense." Not in New Jersey. Let me show you the full, honest picture.

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What Actually Changed on January 1

For almost 20 years, the federal government offered a residential solar tax credit — officially the Section 25D credit. Most recently it was worth 30% of your system cost, taken right off your federal taxes. On a typical $25,000 home solar system, that was about $7,500 back.

In July 2025, Congress passed and the President signed the law widely known as the One Big Beautiful Bill Act (OBBBA). Buried in it was a provision that ended the 25D residential credit — nearly a decade ahead of its previously scheduled wind-down.

Here's the part that catches people off guard: there was no phase-down. It didn't drop from 30% to 26% to 22%. It went straight to zero on January 1, 2026.

The one exception: if your installation was completed on or before December 31, 2025, you can still claim the credit on your 2025 taxes. The IRS treats the expense as "made" when the system is finished — not when you signed, not when you paid a deposit. Finished in 2025, you're in. Finished in 2026, you're not.

So if you're pricing solar in 2026 and someone quotes you a "30% federal tax credit," walk away. For a homeowner buying with cash or a loan this year, that credit does not exist anymore.

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The Honest Part Most Solar Companies Won't Say

Losing a 30% credit is a real loss. I'm not going to spin it. Seven thousand dollars is seven thousand dollars.

A lot of my competitors are quietly hoping you won't notice, or they're inventing "instant rebates" and "manufacturer credits" that are really just marked-up prices with the discount baked back in. That's not how I do business, and it's not why I named this company Solar 4 Heroes.

Here's the honest math: the federal credit made solar cheaper. What made solar worth it was never really the credit — it was the fact that you stop renting your electricity from a utility that raises rates on you almost every year. The credit was the cherry. New Jersey's own incentives, net metering, and 25 years of avoided utility bills are the cake.

And in New Jersey, the cake is still very much on the table.

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What New Jersey Homeowners Still Get in 2026

This is the part that gets buried in the national headlines. The federal credit was national. But solar economics are mostly local — and New Jersey remains one of the strongest solar states in the country. None of the following went away on January 1:

Read that net metering line again, because it's the one that matters most this summer. Under New Jersey's 1:1 net metering, the credits your panels earn are worth whatever the utility charges — so when JCP&L or PSE&G raises rates, the value of your solar production goes up, not down. The same rate hikes that squeeze your neighbors quietly make your panels more valuable.

And the SREC-II program (the incentive most people still call "SRECs") pays you on top of your bill savings. It's a separate check, tied to how much clean energy you produce, locked in for 15 years. New Jersey moved into a new program year on June 1, 2026, so I'll always confirm the current-year rate with you before you sign anything — but the structure is intact.

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Why the Math Still Works — Especially Right Now

Step back and look at the two trend lines.

Line one: what you pay the utility. New Jersey already had the biggest electricity rate hike of any state in 2025. This summer, typical JCP&L customers saw total bills jump nearly 20% starting June 1 before the state stepped in with credits — and the underlying pressure isn't going away. Data centers are pulling enormous new load onto the PJM grid, the capacity auctions keep clearing high, and this month's heat wave just showed everyone how thin the margins get when demand spikes. Utility rates go one direction over 25 years, and it isn't down.

Line two: what you pay for solar. A fixed loan payment. Locked in the day you sign. It does not care about heat waves, capacity auctions, data centers, or the next rate case.

The federal credit changed the starting number on line two. It did nothing to change the direction of line one. And line one is the reason people go solar in the first place. Every month you stay 100% on the grid is a month you're exposed to a bill that has been climbing faster in New Jersey than almost anywhere in America.

Losing the credit raised the bar to get started. Rising rates raised it right back — in your favor.

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One Nuance: Leases and PPAs

There's a wrinkle worth knowing about. The residential credit for systems you own is gone. But for third-party-owned systems — a lease or a power-purchase agreement, where a company owns the panels on your roof and you pay for the power — that company may still be able to claim a commercial federal credit and pass some of the savings back to you through a lower rate.

I'll be straight with you: the rules here are tightening through 2026 and they depend heavily on timing and eligibility. It is not the slam dunk the owned-system credit used to be, and a lease is a very different financial decision than owning your system outright. If that's a path you're curious about, ask me and I'll tell you honestly whether it still makes sense for your situation and your timeline — not what's easiest to sell.

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What I'd Do If I Were You

If you were already thinking about solar and the tax-credit news made you shelve the idea, I'd un-shelve it — but for the right reasons.

Don't rush because of fake urgency. Do run the actual numbers for your roof, your usage, and your utility, in a New Jersey market where net metering, SREC-II, and the tax exemptions are all still here and your utility rate is still climbing. That's a real, honest comparison, and it's free.

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Frequently Asked Questions

Did the federal solar tax credit really expire?

Yes. The 30% residential solar tax credit (Section 25D) ended for homeowners who purchase their own system, effective January 1, 2026, under the One Big Beautiful Bill Act signed in July 2025. There was no phase-down — it went from 30% straight to 0%. The only people who can still claim it are those whose systems were installed and completed on or before December 31, 2025.

How much was the federal solar tax credit worth?

It was 30% of your total system cost, applied against your federal income taxes. On a typical $25,000 residential system, that came to roughly $7,500. For a homeowner buying with cash or a loan in 2026, that amount is now $0.

Is solar still worth it in New Jersey without the federal tax credit?

For most New Jersey homeowners, yes. The federal credit lowered the upfront cost, but the long-term value of solar comes from 1:1 net metering, 15 years of SREC-II incentive payments, sales- and property-tax exemptions, and 25 years of avoided utility bills in a state with some of the fastest-rising electricity rates in the country. Those all remain in place in 2026.

What solar incentives does New Jersey still offer in 2026?

New Jersey still offers full retail-rate net metering, the SuSI / SREC-II (ADI) program that pays a fixed incentive per 1,000 kWh produced for 15 years, a sales-tax exemption on solar equipment, and a property-tax exemption so solar doesn't raise your property taxes. Combined with $0-down financing, they keep New Jersey one of the strongest solar markets in the nation.

Can I still get a federal credit through a lease or PPA?

Possibly. With a third-party-owned system (a lease or power-purchase agreement), the company that owns the panels may still claim a commercial federal credit and pass part of the savings to you through a lower rate. The eligibility rules are tightening in 2026 and depend on timing, so it's worth asking us directly whether it applies to your situation before assuming it does.

Does Solar 4 Heroes serve my area?

Yes — we work with homeowners across New Jersey and throughout the East Coast. If you want to know exactly what your home looks like with solar in a post-tax-credit New Jersey, reach out. We'll give you real, honest numbers with no pressure and no fake urgency.

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The Credit Is Gone. The Reason to Go Solar Isn't.

The 30% federal tax credit was a great deal, and I'm sorry to see it go. But it was always a discount on the real prize — and the real prize is being done with a utility bill that goes up almost every single year while your neighbors keep paying it.

New Jersey still pays you to go solar. Your utility still credits you at the full retail rate. And this month's heat wave was one more reminder of where grid prices are headed. Your solar loan payment, meanwhile, gets locked in today and never moves again.

If you want to see what that looks like for your home — real system size, real savings, real payment, honestly compared to where your utility bill is going — reach out. No jargon. No runaround.

Solar made easy.

📞 Call or text us directly
💻 Get a free quote at Solar4Heroes.com

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Solar 4 Heroes serves homeowners across CT, DE, FL, MA, MD, NH, NJ, NY, PA, RI, and VA. Call us at (856) 308-5144 or reach out at cj@solar4heroes.com.