Most solar coverage this summer is treating the death of the 30% federal tax credit like a weather event, something unfortunate that happened and now we move on. That framing misses the real problem. The credit wasn’t a nice bonus. For most homeowners, it was the entire financial justification for buying a system outright. Without it, the ROI math doesn’t just get worse. It breaks in some cases, and requires a full rebuild in others.

Here’s where things stand: BloombergNEF confirmed on June 15, 2026 that U.S. residential solar installations are tracking toward just 4.1 GW this year, down 15% from 2025 and the lowest level since 2021. The One Big Beautiful Bill Act, signed July 4, 2025, ended Section 25D permanently as of December 31, 2025. If you didn’t close on your system before New Year’s, that credit is gone. No phase-out, no grandfathering for contracts in progress. Gone.

What almost nobody is explaining clearly: the commercial tax credit (48E) survived through 2027. That single fact reshapes who should own your solar panels this summer, and it’s the first place any honest recalculation has to start.

The Ownership Structure Question Is Now the Most Important One

Before you size a system or get quotes, you need to decide whether you’re buying or leasing. That decision used to be mostly about preference and credit scores. Now it’s about who can actually capture federal incentives.

Because 48E applies to third-party owners, installers and leasing companies can still claim a federal credit on the hardware they own and install on your roof. They can pass some of that value to you through lower monthly payments or reduced prepaid PPA prices. You, buying outright, get nothing from Washington.

That’s a structural disadvantage of roughly $7,500 to $9,000 on a typical 10 kW system at current prices. Leases and prepaid PPAs aren’t the right answer for everyone, but anyone who dismisses them reflexively in 2026 is doing the math wrong. Get a real quote on a prepaid PPA, calculate the effective cost per kWh over 20 years, and compare it honestly against an owned system with no federal offset. The gap is smaller than your installer will volunteer.

The tradeoff is real too: you don’t own the asset, you can complicate a home sale, and you’re locked into a contract. But for homeowners in moderate-incentive states who planned to use the 30% credit as their primary justification, a prepaid PPA deserves a serious look right now.

State Incentives Have Become the Whole Game

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LocationUtility RateState IncentiveSystem TypePayback Period
Albany, NY30¢/kWh25% credit (max $5,000)Owned8-10 years
Suburban Houston, TX12¢/kWhNoneOwned13-16 years
MassachusettsMarket rate15% (max $1,000) + net meteringOwnedImproved by stacking
Maryland (income-eligible)Market rate$750/kW grant (max $7,500)OwnedImproved by grant

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With Washington out of the residential picture, state programs are now carrying the entire policy load, and they vary wildly. New York’s 25% credit (capped at $5,000) and Maryland’s $750 per kW grant for income-eligible households (up to $7,500) are among the strongest in the country. Massachusetts offers 15% up to $1,000, which sounds modest but stacks on top of the state’s net metering rules and utility rebates.

If you’re in Texas, Florida, or most of the Southeast, your state incentive situation is thin to nonexistent. That matters enormously for payback period. A homeowner in Albany with a 30-cent utility rate, New York’s 25% credit, and good net metering can still build a reasonable 8 to 10 year payback case. A homeowner in suburban Houston with a 12-cent rate and no state credit is looking at 13 to 16 years on an owned system, possibly longer. Those are fundamentally different propositions.

The honest advice here: before you spend an hour comparing panel brands or inverter specs, spend 20 minutes mapping your actual state and utility incentive stack. The Database of State Incentives for Renewables and Efficiency (DSIRE) is free and current. What you find there will tell you more about your ROI than any panel efficiency rating.

Battery Storage Is Now the ROI Anchor, Not the Upsell

Here’s the number installers should be leading with but often aren’t: BloombergNEF’s February 2026 LCOE report found that battery storage costs fell 31% year-over-year in 2025, hitting a global average of $117 per kWh. That’s a record low, and it’s the reason 40% of new residential solar systems in Q1 2026 were paired with storage, up from 35% in 2025.

Storage changes the calculus because self-consumption is now worth more than export in most utility territories. Time-of-use rates, reduced net metering compensation, and outright NEM rollbacks across California, Nevada, and elsewhere have made selling excess power back to the grid a weak financial strategy. A battery lets you consume what you generate, avoid peak-rate grid draws in the evening, and build resilience against outages. All three of those have real dollar values that don’t depend on any federal credit.

Run the numbers on storage carefully though. A 10 kWh battery adds $8,000 to $12,000 to a system quote before incentives. Some states, including New York and Massachusetts, offer storage-specific credits that reduce that. Others don’t. The question to ask your installer: what’s the incremental payback period on the battery alone, modeled against my specific utility’s rate structure? If they can’t answer that with actual numbers, find someone who can.

Right-Sizing Is More Important Than It’s Ever Been

When a 30% credit softened the upfront cost, oversizing a system was a forgivable mistake. You paid more, but the credit cushioned it and you banked excess generation. Without that cushion, every kilowatt of capacity needs to justify itself.

The current math favors right-sizing to roughly 80 to 90% of your annual consumption, particularly in states where net metering credits have been reduced. Generating excess power that gets credited at wholesale rates (sometimes 3 to 5 cents per kWh) while you paid retail prices to install that capacity is simply a bad trade. Smaller system, tighter offset, shorter payback. Add a battery to capture the self-consumption benefit before you add another panel.

This also means getting real about your consumption baseline before signing anything. Pull 12 months of utility bills. If you’re planning an EV purchase or a heat pump installation in the next two years, model that load in. Sizing for what you’ll actually consume beats guessing and over-building.

What to Do If You’re Starting Fresh This Summer

The homeowners who make solar work in 2026 will be the ones who accept the new math instead of trying to recreate the 2023 economics. The federal credit is gone for direct ownership. The installation market is slow, which means installer competition is real and pricing pressure is in your favor. Battery costs are at record lows. State programs are the primary incentive lever.

Get three quotes. Ask each installer to model owned versus prepaid PPA with current 48E pass-through. Verify your state’s incentive stack yourself rather than relying on what the sales rep tells you. Right-size the system. Pair storage if your utility’s rate structure rewards self-consumption.

None of that is complicated. But it is different from the playbook most solar content was written for, and that gap between old advice and new reality is exactly where homeowners are getting burned right now.

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