Which states have a solar tax credit in 2026?

Of the 11 states we publish: New York (25%, up to $5,000); Arizona (25%, up to $1,000); Massachusetts (15%, up to $1,000). On a $200-a-month system that is $4,089 in New York, $1,000 in Arizona, $1,000 in Massachusetts. Each is read from the state's own statute or tax department (linked in the table), on 2026-09-05.

Does the state credit apply to a lease?

New York: yes — the state's own source extends it to lease and PPA customers, and the engine accrues it on the lease payments up to the cap ($5,000 in New York on this bill). The other modelled credits go to buyers only.

What about SRECs and REC payments?

Illinois pays $80.77 per MWh (Illinois Shines REC contract); New Jersey pays $77.00 per MWh (SuSI Administratively Determined Incentive (SREC-II)). These are performance incentives — paid per megawatt-hour produced over many years, not up front. They are recorded from their sources but not yet paid out by the model, so the net costs shown for those states are conservative.

How much does a state credit change payback?

New York: 7.3 yr without it, 5.5 yr with it; Arizona: 12.6 yr without it, 12.1 yr with it; Massachusetts: 7.5 yr without it, 7.1 yr with it — on a $200-a-month system, cash, quoted prices.

Are there rebates for low-income households?

Yes, and they are not modelled as general incentives: California, New York and Maryland record income-qualified programmes in their notes. The state pages carry the details and sources.

Are there sales or property tax exemptions?

Several states exempt solar equipment from sales tax or exclude it from property tax; the records for New York, Arizona, Massachusetts, California, Maryland, Pennsylvania, Texas mention one or another. They do not change the installed price or the credit and are not modelled; the page lists what each record says.

Do utilities pay rebates?

Some do, locally, and they are not statewide incentives: the records note that Texas buyback plans and rebates vary by utility and retail provider, that New York's per-watt NY-Sun incentive differs by region and block, and that Philadelphia runs a city-only rebate. None is modelled; each state page says what was checked.

Is there a federal credit on top?

Not for a buyer in 2026: 25D unavailable for property placed in service after 2025-12-31 (One Big Beautiful Bill Act). A leased system's owner still claims 30% under IRC 48E (Clean Electricity Investment Credit). Source: https://www.irs.gov/credits-deductions/residential-clean-energy-credit, read 2026-09-05.

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State solar incentives in 2026

In 2026 a solar buyer gets no federal credit. What survives is the state layer, and it is thin: of the 11 states we publish, three still pay a buyer — New York $4,089, Arizona $1,000, Massachusetts $1,000 on a $200-a-month system — two pay per kilowatt-hour produced (Illinois and New Jersey), and six pay nothing upfront.

Each record below was read from the state's statute, tax department or regulator on the date shown; DSIRE, the usual index, renders only in a browser and could not be read by machine. Where a state has nothing, the page says so and says what was checked.

The federal credit is gone for buyers

25D unavailable for property placed in service after 2025-12-31 (One Big Beautiful Bill Act). A cash or loan buyer in 2026 receives 0%; the owner of a leased system still claims 30% under IRC 48E (Clean Electricity Investment Credit) and prices the lease with it.IRC 25D (expired) — IRS, read 2026-09-05. What ended, and what survives.

States that still pay a buyer

Statewide credit to a buyer on a $200-a-month system, 2026. Zero is the honest reading for most states.

State	Incentive	Terms	On this system	Also to leases?	Source
New York	Solar Energy System Equipment Credit (Form IT-255)	25%, up to $5,000	$4,089	yes — $5,000 accrued over the agreement	source, read 2026-09-05
Arizona	Residential Solar Energy Device Credit (Form 310, A.R.S. 43-1083)	25%, up to $1,000	$1,000	buyers only	source, read 2026-09-05
Massachusetts	Residential Renewable Energy Income Tax Credit (Schedule EC)	15%, up to $1,000	$1,000	buyers only	source, read 2026-09-05

Terms as the sources state them: New York: 25% of qualified expenditure, limited to $5,000; principal residence in NY; purchase, lease, or a 10-year-plus PPA all qualify; unused credit carries forward five years. Arizona: 25% of the cost of the device; maximum $1,000 in a taxable year and $1,000 in aggregate for the same residence; five-year carryforward; the taxpayer's Arizona residence. Massachusetts: 15% of net expenditure or $1,000, whichever is less (M.G.L. c. 62 s. 6(d)); net expenditure excludes federal credits and HUD grants; principal residence; three-year carryover. Also stated at https://budget.digital.mass.gov/govbudget/fy23/tax-expenditure-budget/personal-income-tax/credits-against-tax/1-601.

What a state credit does to payback

The same $200-a-month system in each paying state, cash, quoted prices, with and without its state credit — everything else held.

State	Net cost without	Net cost with	Payback without	Payback with	25-year net with
New York	$16,355	$12,266	7.3 yr	5.5 yr	$54,330
Arizona	$18,715	$17,715	12.6 yr	12.1 yr	$27,237
Massachusetts	$17,029	$16,029	7.5 yr	7.1 yr	$50,567

A capped credit is worth the same on a large system as on a small one, so its effect on payback shrinks as the bill grows.

Performance incentives we record but do not model

Two states pay for production rather than up front. The engine records them from their sources but does not yet pay them out, so the figures it shows for these states are conservative.

Illinois — Illinois Shines REC contract, Small Distributed Generation 0-10 kW AC: $80.77 per MWh. 2026-27 Program Year REC price $80.77/REC in Group B (ComEd territory, including Chicago) and $70.37/REC in Group A (Ameren and others); 1 REC = 1 MWh, so $0.08077/kWh. Contracts run 15 or 20 years; 2026 contracts pay 50% at energization and the rest ratably over six years. A $20/REC adder applies in 2026-27 to customer-owned Small DG that takes no federal credit. source, read 2026-09-05.
New Jersey — SuSI Administratively Determined Incentive (SREC-II), residential net-metered: $77.00 per MWh. Board order of 2026-05-21 (Dockets QO20020184 and QO26030096) directs $77/MWh, down from $85/MWh, for all registrations received on or after 2026-07-27; 15-year term fixed at registration. source, read 2026-09-05.

States with nothing upfront

No statewide credit or rebate to a typical owner-occupier, verified against the sources named on each state page:

California — No state income-tax credit and no statewide rebate for residential PV
Connecticut — No upfront statewide rebate or tax credit
Florida
Maryland — The Residential Clean Energy Rebate Program ($1,000 for solar PV) is closed
Pennsylvania — No statewide residential rebate and no state income-tax credit
Texas — Texas has no state income tax, hence no state tax credit, and no statewide rebate

Income-qualified programmes

California, New York and Maryland record programmes limited by household income. They are real money for the households that qualify and are not modelled as general incentives here; the state pages quote the eligibility as the programme states it, with the source.

How the credits are claimed

New York. Solar Energy System Equipment Credit (Form IT-255): 25% up to $5,000, claimed on the state return. The source lists purchase, a written lease, and a PPA of ten years or more as qualifying; for leases the credit accrues on payments made each year, up to the same $5,000 cap. source, read 2026-09-05.
Arizona. Residential Solar Energy Device Credit (Form 310, A.R.S. 43-1083): 25% up to $1,000, claimed on the state return. A.R.S. 43-1083 credits the taxpayer who installs the device; not extended to third-party-owned systems. source, read 2026-09-05.
Massachusetts. Residential Renewable Energy Income Tax Credit (Schedule EC): 15% up to $1,000, claimed on the state return. The regulation credits the taxpayer's own net expenditure on renewable energy source property; it does not extend to third-party-owned systems. source, read 2026-09-05.
Everywhere. Confirm eligibility with a tax professional: caps are per residence, carryforwards differ by state, and a credit can only offset tax you owe.

Exemptions and local programmes we record

Not credits, and not modelled, but recorded because a buyer will hear about them: tax exemptions that do not change the installed price, regional or utility programmes that are not statewide, and city rebates. Each line is what the state's record says; the state page carries the source.

New York: NY-Sun (NYSERDA) pays a per-watt incentive that differs by region (Con Edison, Long Island, Upstate) and declines by MW block. Current levels are published only in Tableau dashboards and were not machine-readable on 2026-09-05. Its current block rate is therefore not on file. The Long Island Affordable Solar incentive ($0.40/W) is income-qualified.
Arizona: Solar devices are exempt from transaction privilege (sales) tax.
Massachusetts: SMART is performance-based, declines by block and varies by utility; it has no single statewide value to record.
California: A property-tax exclusion for solar construction exists; it does not change installed cost.
Maryland: The Residential Clean Energy Rebate Program ($1,000 for solar PV) is closed; applications had to be submitted before 2024-11-30 (secondary source: updated 2026-01-06; MEA program pages returned server errors on 2026-09-05).
Pennsylvania: No statewide residential rebate and no state income-tax credit (secondary source: last edited 2026-03-18). Pennsylvania SRECs trade at market prices; there is no fixed value to record. Philadelphia runs a city-only rebate.
Texas: Texas has no state income tax, hence no state tax credit, and no statewide rebate. Tax Code s. 11.27 exempts from property tax the appraised value added by a solar device for on-site use; that does not change installed cost. Utility and retail-provider buyback plans and rebates vary locally.

Questions

Which states have a solar tax credit in 2026?: Of the 11 states we publish: New York (25%, up to $5,000); Arizona (25%, up to $1,000); Massachusetts (15%, up to $1,000). On a $200-a-month system that is $4,089 in New York, $1,000 in Arizona, $1,000 in Massachusetts. Each is read from the state's own statute or tax department (linked in the table), on 2026-09-05.
Does the state credit apply to a lease?: New York: yes — the state's own source extends it to lease and PPA customers, and the engine accrues it on the lease payments up to the cap ($5,000 in New York on this bill). The other modelled credits go to buyers only.
What about SRECs and REC payments?: Illinois pays $80.77 per MWh (Illinois Shines REC contract); New Jersey pays $77.00 per MWh (SuSI Administratively Determined Incentive (SREC-II)). These are performance incentives — paid per megawatt-hour produced over many years, not up front. They are recorded from their sources but not yet paid out by the model, so the net costs shown for those states are conservative.
How much does a state credit change payback?: New York: 7.3 yr without it, 5.5 yr with it; Arizona: 12.6 yr without it, 12.1 yr with it; Massachusetts: 7.5 yr without it, 7.1 yr with it — on a $200-a-month system, cash, quoted prices.
Are there rebates for low-income households?: Yes, and they are not modelled as general incentives: California, New York and Maryland record income-qualified programmes in their notes. The state pages carry the details and sources.
Are there sales or property tax exemptions?: Several states exempt solar equipment from sales tax or exclude it from property tax; the records for New York, Arizona, Massachusetts, California, Maryland, Pennsylvania, Texas mention one or another. They do not change the installed price or the credit and are not modelled; the page lists what each record says.
Do utilities pay rebates?: Some do, locally, and they are not statewide incentives: the records note that Texas buyback plans and rebates vary by utility and retail provider, that New York's per-watt NY-Sun incentive differs by region and block, and that Philadelphia runs a city-only rebate. None is modelled; each state page says what was checked.
Is there a federal credit on top?: Not for a buyer in 2026: 25D unavailable for property placed in service after 2025-12-31 (One Big Beautiful Bill Act). A leased system's owner still claims 30% under IRC 48E (Clean Electricity Investment Credit). Source: https://www.irs.gov/credits-deductions/residential-clean-energy-credit, read 2026-09-05.

This is general information, not tax advice. It is computed from published statute, regulation and data, each cited with the date it was read. Whether a credit applies to you depends on your own tax situation: confirm it with a tax professional before you rely on any figure on this page.

Published 5 September 2026. Data last verified 5 September 2026. About the author.