Are energy tax credits still available in 2026?
Depends on the credit and your dates
Some are. P.L. 119-21 ended the §25D residential clean energy credit for expenditures after 2025, the §25C home improvement credit for property placed in service after 2025, and §179D for buildings whose construction begins after June 30, 2026. The §48E investment credit continues, but wind and solar property must now be placed in service by December 31, 2027, and foreign-entity restrictions apply.
Reviewed by Ebot Mbi, CPA, EA · Last reviewed · Law and figures current as of September 17, 2026
Key takeaways
- Homeowners: §25D and §25C do not apply to 2026 installations.
- §179D does not apply to property whose construction began after June 30, 2026.
- §45L does not apply to homes acquired after June 30, 2026; §30D ended for vehicles acquired after September 30, 2025.
- Wind and solar facilities that did not begin construction before July 5, 2026 must be placed in service by December 31, 2027 to qualify under §48E.
- The 30% §48E rate generally requires prevailing wage and apprenticeship compliance, unless the project is under 1 megawatt.
What it is
The Inflation Reduction Act of 2022 expanded federal energy incentives for homes, vehicles, and businesses. The One Big Beautiful Bill Act, P.L. 119-21, signed July 4, 2025, ended many of them early and tightened others. Whether a project qualifies now depends on which provision applies and on dates: when money was spent, when construction began, when property was placed in service, or when a home or vehicle was acquired.
This page summarizes the main provisions as of September 17, 2026. Each has its own technical rules, so confirm the details for your project.
What the law says
For individuals, §25D(h) provides that the residential clean energy credit does not apply to expenditures made after December 31, 2025, and §25C(i) provides that the energy efficient home improvement credit does not apply to property placed in service after December 31, 2025. The §30D new clean vehicle credit ended for vehicles acquired after September 30, 2025.
For businesses, §179D(i) provides that the energy efficient commercial buildings deduction does not apply to property whose construction begins after June 30, 2026. Section 45L(h) ends the new energy efficient home credit for homes acquired after June 30, 2026.
The §48E clean electricity investment credit continues, with a 6% base rate that increases to 30% if prevailing wage and apprenticeship requirements are met or the facility has a maximum net output of less than 1 megawatt. Under §48E(e)(4), as added by P.L. 119-21, wind and solar property placed in service after December 31, 2027 does not qualify unless the facility began construction within 12 months after enactment, meaning before July 5, 2026. Other technologies follow a longer phase-down. Prohibited foreign entity rules also restrict credits for many projects, including material assistance rules for facilities beginning construction after December 31, 2025.
Requirements and tests
Key tests for business projects:
- Beginning of construction: for wind and solar, IRS Notice 2025-42 requires physical work of a significant nature for most projects and limits the 5% safe harbor to certain small solar facilities.
- Placed in service: a wind or solar facility that began construction on or after July 5, 2026 must be placed in service by December 31, 2027.
- Prevailing wage and apprenticeship: needed for the 30% rate on projects of 1 megawatt or more, with payroll records to prove it.
- Foreign entity restrictions: the taxpayer must not be a prohibited foreign entity, and projects must meet material assistance cost ratio rules where they apply.
- §179D: the building's construction must have begun by June 30, 2026, energy savings must be at least 25% relative to the reference standard and certified, and the 2026 maximum is $5.94 per square foot with prevailing wage and apprenticeship compliance, or $1.19 without it (Rev. Proc. 2025-32).
How it works
For a commercial solar project, the investment credit equals the applicable percentage times the eligible basis of energy property placed in service during the year, with possible bonus amounts for domestic content or energy communities. The credit reduces depreciable basis by half of its amount, and it can be recaptured if the property is disposed of within five years.
The §179D deduction is computed per square foot based on the percentage of energy savings: for 2026, $0.59 increased by $0.02 for each percentage point above 25%, up to $1.19, or $2.97 increased by $0.12 per point, up to $5.94, when prevailing wage and apprenticeship rules are met. It is a deduction, so its value depends on your tax rate.
Assumptions: Project 1: a commercial rooftop solar system under 1 megawatt; construction began August 2026; eligible basis $200,000; placed in service December 2027; the owner is not a prohibited foreign entity and material assistance rules are met; no bonus credits.; Project 2: the same system placed in service in January 2028.; Project 3: a 10,000-square-foot commercial building whose construction began May 2026, placed in service in 2026, with certified 40% energy savings and prevailing wage and apprenticeship compliance; owner is a C corporation taxed at 21%.; Project 4: a homeowner installs solar panels in 2026.
| Project 1: 30% × $200,000 (§48E) | $60,000 |
|---|---|
| Project 2: placed in service after December 31, 2027 | $0 |
| Project 3: §179D rate $2.97 + (15 points × $0.12) | $4.77 per sq ft |
| Project 3: deduction, 10,000 sq ft × $4.77 | $47,700 |
| Project 3: tax value of the deduction at 21% | $10,017 |
| Project 4: §25D credit for a 2026 expenditure | $0 |
Timing decides the result: the same solar system is worth $60,000 of credit in December 2027 and $0 a month later.
Illustration only; not a projection of your results.
Risks and IRS scrutiny
The IRS examines beginning-of-construction evidence, placed-in-service dates, prevailing wage records, and foreign entity compliance. Missing payroll records can reduce the §48E rate from 30% to 6% unless correction payments and penalties are made. Credits claimed on property that missed a statutory deadline are disallowed with interest and possible penalties. Be cautious of sellers who describe residential credits as still available for 2026 installations.
Who it is not for
These incentives are not available for home solar, heat pumps, or insulation installed in 2026 by homeowners, for new vehicles acquired after September 30, 2025, or for commercial buildings whose construction began after June 30, 2026. Wind and solar projects that cannot be placed in service by the end of 2027, and that did not begin construction before July 5, 2026, are also out.
How ebotCPA helps
We check each project against the statutory dates, model the §48E rate with and without prevailing wage compliance, review foreign entity exposure, and confirm whether §179D or §45L still applies to a building based on its construction or acquisition date.
Book a $497 Case Analysis to have Ebot Mbi, CPA, EA review your facts before you act.
Frequently asked questions
Can I still get the 30% solar tax credit for my home in 2026?
No. Under IRC §25D(h), the residential clean energy credit does not apply to expenditures made after December 31, 2025.
Is the §179D deduction still available?
Only for property whose construction began on or before June 30, 2026, under IRC §179D(i).
What is the deadline for commercial solar projects?
Under IRC §48E(e)(4), solar and wind property must be placed in service by December 31, 2027 unless the facility began construction before July 5, 2026.
Does the 30% business energy credit require prevailing wages?
Generally yes for facilities of 1 megawatt or more; otherwise the base rate is 6%.
Have facts like these?
Book a $497 Case Analysis to have Ebot Mbi, CPA, EA review your facts before you act.