The 30% Federal Battery Credit Is Gone — What Homeowners Can Still Claim in 2026

The federal 30% residential clean energy credit expired December 31, 2025. What still qualifies for a home battery in 2026 — leases and PPAs, state programs, local rebates — and how to verify before you buy.

If a quote still promises “30% back from the IRS” on a battery you buy outright in 2026, it is describing a credit that no longer exists. The change is recent enough that plenty of installer websites — and some calculator tools — have not caught up. Here is the actual picture, with the dates and sources so you can verify it yourself.

What ended, exactly

The federal Residential Clean Energy Credit (Section 25D) covered 30% of the cost of solar panels, standalone batteries and other clean-energy property for owner-occupied homes. The One Big Beautiful Bill Act, signed in July 2025, terminated the credit for property placed in service after December 31, 2025.

In practice: buy a battery with cash or a loan, have it placed in service in 2026, and there is no federal credit — whether the battery is standalone or paired with new solar. If your system was placed in service in 2025, you may still claim the credit on your 2025 return; transitional and safe-harbor rules are fact-specific, so confirm with a tax professional before assuming either way.

What still exists in 2026

1. Leases and PPAs — a 30% credit, but not yours

Third-party-owned systems (leases and power purchase agreements) can still generate a 30% federal credit under Section 48E. The credit goes to the company that owns the system, not to you, and it is not claimed on your tax return. Some providers pass part of the benefit through as a lower monthly payment — ask them to show exactly how.

If you are comparing a lease against a cash purchase, get both quotes with the credit treatment spelled out line by line. “You get 30% back” is not an accurate description of a lease in 2026.

2. State, local and utility programs — narrower than they used to be

• California: the general market-rate SGIP budget closed to new applicants on December 31, 2025. The remaining SGIP pathway is income-qualified equity and resiliency funding — historically large (up to roughly $1,100/kWh for storage) but heavily subscribed, with many applications waitlisted.
• Local programs can still help: some Community Choice Aggregators run their own battery rebates. CleanPowerSF, for example, has offered up to $3,750 per home ($250–$300/kWh) for qualifying grid-interactive systems. Reservation timing usually matters — often before the utility grants permission to operate.
• Elsewhere: state, utility and municipal programs vary widely, and many 2026 programs are pilots with caps or waitlists. Check DSIRE and your own utility before counting on anything.

3. Virtual power plant income — not a credit, but real money

Utilities and aggregators pay batteries to provide grid services during peak events. California programs have paid roughly $400–$1,500 per year, and Tesla’s DSGS capacity payments for the 2026 season have ranged from about $7 to $14 per kW per month depending on the month. Enrollment is not guaranteed and programs change — treat this as upside on a battery that already makes sense, not as the reason to buy.

How to verify your own incentives

• Ask for an itemized quote that does not assume a federal credit.
• Check DSIRE and your utility or CCA program page; confirm the program is open and funded today.
• For leases and PPAs, ask who claims the 48E credit and how it changes your payment.
• Keep invoices and placed-in-service documentation; talk to a tax professional about your own filing.
• Verify VPP enrollment separately — a listing does not mean a program is accepting homes.

What this changes for battery payback

A 30% federal credit used to flatter payback by about 30% of the gross cost — roughly $4,500 on a $15,000 battery. Without it, payback depends almost entirely on your electricity rate structure. If your utility has a wide time-of-use spread, the battery can still earn its keep. If you pay a flat, low rate, the honest answer may be that bill savings alone will not recover the cost.

Run your numbers with zero federal credit and only the incentives you can actually claim. The calculator lets you enter any rebate you qualify for and shows the net cost and payback.

Quick answers