For years, the headline incentive for going solar was the 30% federal tax credit for homeowners who bought their system. That landscape changed heading into 2026 — so if you're researching solar now, it's worth understanding what applies today before you make a decision.
What the credit was
The federal Residential Clean Energy Credit let homeowners who purchased a solar system (with cash or a loan) claim a percentage of the system cost against their federal income taxes. At its peak it was worth 30% — a major piece of the payback math for owned systems.
What changed for 2026
Recent federal legislation moved up the timeline for the residential version of that credit. The short version: the generous purchase-side credit homeowners relied on is no longer the sure thing it was a couple of years ago, and the exact benefit available to a buyer in 2026 looks different than it did in 2024. Because the details are specific to your situation and to the year your system is placed in service, this is precisely the kind of number you want confirmed in writing — not assumed from an old brochure.
Why financing choice matters more now
Here's the nuance a lot of homeowners miss: third-party-owned systems — leases and power purchase agreements (PPAs) — are treated differently from systems you buy outright. With a lease or PPA, the provider owns the equipment and may be able to capture available business-side incentives, then pass a portion of that value to you through a lower rate. That's a big reason prepaid PPAs and leases have stayed attractive in California even as the homeowner-purchase credit tightened.
In other words, the "best" way to pay for solar isn't just about your budget anymore — it can change which incentives are in play. We compare the trade-offs in detail in our financing guide.
California still has its own value drivers
Federal incentives are only part of the picture. In Southern California, the real engine of solar savings is avoiding ever-rising Southern California Edison (SCE), LADWP, and PG&E utility rates — especially the 4–9 p.m. time-of-use peak — and, under NEM 3.0, getting more value from your own production with a battery. For high-desert homes in Lancaster and Palmdale that run AC hard all summer, those evening peak rates are exactly where storage pays off. These savings exist regardless of how the federal credit evolves, and the actual amount depends on your usage and rate plan.
What to do with this
Don't let incentive uncertainty freeze you — but don't let a salesperson quote you a credit you may not qualify for, either. Whether you're eligible, and for how much, depends on your personal tax situation and the year your system is placed in service, so confirm the specifics with a tax advisor and with ACS before you sign. Ask any installer to show your numbers two ways: with and without the federal benefit. A quote that still holds up without it is a quote you can trust. ACS has designed solar and battery systems across Southern California — the Antelope Valley, Los Angeles, and Ventura counties — since 1983, and that's how we build every ACS estimate. Request a free estimate to see what makes sense for your home and rate plan.