Tip
Solar & renewables — what to know in 2026
The federal credit is 30% with no cap through 2032
The 25D Residential Clean Energy Credit covers 30% of the total installed cost of solar PV, batteries, geothermal, small wind, and fuel cells. No cap, no income test, runs through 2032 then steps down.
Net metering rules vary wildly by state
- Full net metering (favorable): credits at retail rate. Found in NJ, MA, NY (legacy), MN, CO.
- Net billing (less favorable): exports credited at avoided-cost rate, lower than retail. CA NEM 3.0, HI, AZ post-2017, NC residential.
- Limited or no net metering: some southern states have eliminated retail-rate compensation. AL, MS, FL (capped).
Net metering rules drive solar economics more than panel cost. A "great" solar quote in a poor net-metering state may have a 12-year payback; a moderate quote in a generous state may have a 6-year payback.
Battery storage — when it makes sense
- Net billing states (CA, HI): battery is essential to capture self-consumption value
- Time-of-use rate plans: charge from solar midday, discharge at peak rate
- Frequent grid outages: backup power resilience
- Full net metering states: battery economics are weaker — grid acts as your "battery"
Geothermal heat pumps — the deepest 25D stack
Ground-source heat pumps qualify for the same 30% uncapped 25D credit as solar. They cost $20,000-$35,000 installed but cut heating + cooling costs by 50-70%. Best ROI in cold climates with high electricity costs.