The Federal Solar Tax Credit Is Gone for Homeowners: How Hawaii Residents Still Save Up to 40% in 2026

If you have been researching the federal solar tax credit 2026 rules, here is the direct answer: the 30% federal tax credit for homeowner-purchased solar ended on December 31, 2025, and it is no longer available for new residential installations. That change surprised a lot of Hawaii homeowners. The good news is that Hawaii still offers some of the strongest solar savings in the country, and ProVision Solar can help qualifying homeowners save up to 40% on a new system without any federal credit at all. This guide explains exactly what changed, what you can still claim, and how the math works in 2026.

What Happened to the Federal Solar Tax Credit in 2026?

The federal solar tax credit for homeowners no longer exists in 2026. The Residential Clean Energy Credit, known as Section 25D, was the federal program that let homeowners claim 30% of their solar system cost on their federal taxes. Congress ended it as part of the One Big Beautiful Bill Act, signed into law on July 4, 2025.

The IRS confirmed in its official 2025 guidance that the Section 25D credit “will not be allowed for any expenditures made after December 31, 2025,” per the Internal Revenue Service. The cutoff was based on when installation was completed, not when a contract was signed or a deposit was paid. A system finished on or before December 31, 2025 qualified. A system finished in 2026 does not.

How the Federal Solar Tax Credit 2026 Rules Affect 2025 Installations

The federal solar tax credit 2026 rules did not erase credits that homeowners already earned. If your installation was completed by December 31, 2025, you can still claim the credit on your 2025 federal tax return. If the credit is larger than what you owe, unused amounts may carry forward under IRS rules. Talk with a qualified tax professional about your specific return before filing.

Can Hawaii Homeowners Still Get a Solar Tax Credit?

Yes. Hawaii has its own solar tax credit, and it was not affected by the federal change. The Hawaii Renewable Energy Technologies Income Tax Credit lets homeowners claim 35% of the cost of a solar system, capped at $5,000 per system for single-family homes, per the Hawaii Department of Taxation.

This state credit is a big reason Hawaii remains one of the best places in the nation to go solar. Many states lost their most valuable solar incentive when the federal credit ended. Hawaii homeowners kept theirs. ProVision Solar walks every customer through the paperwork for state incentives as part of the installation process, and you can review the current programs on our Hawaii Solar Incentives page.

How Can Hawaii Residents Still Save Up to 40% on Solar?

Hawaii residents can still save up to 40% on a new solar system in 2026 through a combination of the state tax credit and a financing partnership program offered by ProVision Solar. Under the traditional route, the Hawaii state credit delivers up to 35% in savings. Through our partnership with one of the largest solar financing companies in the industry, qualifying homeowners can unlock savings of up to 40% on the entire system, with $0 out of pocket options to get started.

Here is how the two paths compare in 2026:

• Traditional route: Hawaii state tax credit worth up to 35% of system cost, capped at $5,000 per system for most homes
• ProVision Solar program: savings of up to 40% applied to the entire system, with no federal credit required
• Financing: $0 out of pocket options available through our Residential Financing partners

Every home and tax situation is different, so the fastest way to see your real number is a free quote. Visit our Save Up To 40% page or Contact Us Today for a savings estimate based on your actual electric bill.

Is Solar Still Worth It in Hawaii Without the Federal Credit?

Solar is still worth it in Hawaii in 2026, even without the federal credit, because Hawaii’s electricity prices remain the highest in the United States. Hawaii residential electricity rates run roughly three times the national average, per 2025 data from the U.S. Energy Information Administration. When grid power costs that much, every kilowatt-hour your roof produces is worth far more than it would be almost anywhere else in the country.

The state’s energy direction has not changed either. Hawaii law requires 100% renewable electricity by 2045, a mandate set in 2015 under HRS 269-92, per the Hawaii State Energy Office. Utilities continue to build programs that reward rooftop solar and home batteries. Hawaiian Electric’s Bring Your Own Device Plus program, for example, compensates participating battery owners for sharing stored energy with the grid, per Hawaiian Electric. Pairing panels with a battery through our Tesla Powerwall Installation service can increase both your savings and your backup security.

Does the Federal Credit Still Exist for Businesses?

Yes. The federal change ended the credit for homeowner-purchased systems, but commercial solar projects can still qualify for federal tax incentives under separate business provisions, subject to construction and placed-in-service deadlines, per the Solar Energy Industries Association. If you own a business, a nonprofit, or commercial property in Hawaii, those incentives can still cover a meaningful share of project cost. Learn more on our Federal Tax Incentives page or explore our Commercial Solar Installation services.

Frequently Asked Questions

Is the federal solar tax credit still available in 2026?

No. The federal Residential Clean Energy Credit ended for homeowner-purchased solar systems installed after December 31, 2025. Homeowners cannot claim a federal solar tax credit for new 2026 installations. Commercial solar projects may still qualify for federal incentives under separate business tax provisions.

What solar incentives can Hawaii homeowners claim in 2026?

Hawaii homeowners can claim the state Renewable Energy Technologies Income Tax Credit, worth 35% of system cost and capped at 5,000 dollars per system for most single-family homes. Utility programs from Hawaiian Electric can also compensate battery owners, and ProVision Solar offers a financing program with savings of up to 40%.

Can I still claim the federal credit for a system installed in 2025?

Yes, if your installation was completed on or before December 31, 2025, you can claim the 30% federal credit on your 2025 federal tax return. Unused credit amounts may carry forward under IRS rules. Consult a qualified tax professional about your specific situation before filing.

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

Yes. Hawaii has the highest electricity rates in the nation, roughly three times the national average, so solar savings remain strong without any federal credit. The 35% state tax credit, utility battery programs, and financing options that reach up to 40% in savings keep Hawaii payback periods among the best in the country.

Ready to See What You Can Save in 2026?

The end of the federal solar tax credit changed the math on the mainland far more than it changed the math in Hawaii. Between the 35% state credit, utility battery programs, and ProVision Solar’s up to 40% savings program, 2026 is still a smart year for Hawaii homeowners to go solar. Get a free, no-pressure savings estimate for your home. Contact Us Today and our team will show you exactly what your roof can do.

Information pertaining to laws, regulations, or incentives is accurate at the time of writing this content. However, regulations and systems can change at anytime.