Available Solar and Home Battery Incentives in 2026
February 19, 2026
In 2026, homeowners can still lower the cost of going solar and adding battery storage through a combination of state programs, utility incentives, grid services payments, and solar leasing options. While federal policy has changed, solar and storage continue to deliver strong long-term value through price predictability, power reliability, and greater energy autonomy.
Understanding how today’s incentives and financing options work helps set clear expectations around system cost, monthly payments, and lifetime savings.
What Changed in 2026
The Residential Clean Energy Credit, previously known as the federal solar tax credit, expired at the end of 2025.1 However, the federal tax credit continues to apply to commercial owners of solar energy systems. For homeowners, this means value from that incentive can be captured in the form of a lease and passed via lower monthly payments, instead of being claimed on their personal tax return.
With the lease payment option, the solar provider installs and owns the system while homeowners make a fixed monthly payment for the power it generates. Homeowners save on electricity bills with a low upfront cost while the provider guarantees performance and handles services.
In addition to leasing, there are incentives available at the state, utility, and grid-operator level. These programs are location-specific and subject to change based on funding availability and policy updates.
Incentives Available in 2026
| Incentive Type | How It Works | Example Programs |
|---|---|---|
| State income-tax credits | Some states continue to offer income tax credits for residential solar and battery installations. These credits are typically calculated as a percentage of project cost and may allow unused amounts to roll forward into future tax years. |
• South Carolina: 25 % credit (up to $3,500/yr, ten-year carry-forward)2 • New York: 25 % credit up to $5,0003 |
| Utility or state rebates | Utility and state rebates provide one-time cash incentives based on installed solar capacity (per watt) or battery storage capacity (per kilowatt-hour). These rebates reduce the upfront system cost directly and are often subject to program funding limits. |
• California SGIP: up to $1,000/kWh for qualifying batteries4 • Austin Energy (TX): $2,500 solar rebate5 |
| Net Energy Metering (NEM) |
Net energy metering and net billing programs provide ongoing bill credits for electricity exported to the grid. Compensation structures vary by utility and may depend on time of day, season, or grid demand. These programs affect monthly electricity bills rather than the upfront system price. |
• PG&E Net Billing Tariff (CA) – export values range from ≈ $0.001 to > $2.00 per kWh depending on month and hour6 • Florida Power & Light Net Metering (FL) – exports credited at full retail rate ≈ 10.8 ¢/kWh7 |
| Virtual Power Plant (VPP) Programs |
VPP programs allow homeowners to enroll battery systems in grid support programs. During grid events, enrolled batteries may export energy to the grid in exchange for compensation. Incentives may be structured as annual payments, per-event credits, or performance-based rewards and typically continue as long as the battery remains enrolled. |
• California Demand Side Grid Support: up to $350 / year per battery enrolled8 • Xcel Energy Renewable Battery Connect: $100 a year |
Finding Current Incentives
Solar and storage incentive programs change frequently, and while Tesla maintains a consolidated incentives resource, it is always a good idea to check directly with the program itself. Speak with a Tesla Advisor to learn more about the installation process and what resources are available for you.
Solar and Battery Systems in 2026
Even without a federal tax credit, solar panels paired with battery storage continue to reduce reliance on the grid, provide backup power during outages, and improve long-term energy cost stability. Battery systems such as Powerwall also enable participation in grid programs that were not available to solar-only systems.
Speak with a Tesla Advisor to Learn More
Disclaimer: Tesla does not provide tax or legal advice. Incentive eligibility and treatment vary by jurisdiction and individual circumstances. Consult a qualified professional to understand how available programs apply to your situation.
References
1 Internal Revenue Service. Residential Clean Energy Credit.
https://www.irs.gov/credits-deductions/residential-clean-energy-credit.
2 South Carolina Department of Revenue. Solar Energy or Small Hydropower System Credit (Form TC-38).
https://dor.sc.gov/forms-site/Forms/TC38.pdf
3 New York State Department of Taxation and Finance. Solar Energy System Equipment Credit.
https://www.tax.ny.gov/pit/credits/solar_energy_system_equipment_credit.htm
4 California Public Utilities Commission. Self-Generation Incentive Program (SGIP).
https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/demand-side-management/self-generation-incentive-program
5 Austin Energy. Rebates for Home Rooftop Solar Systems.
https://austinenergy.com/green-power/solar-solutions/for-your-home
6 Pacific Gas and Electric Company. Solar Billing Plan.
https://www.pge.com/en/clean-energy/solar/getting-started-with-solar/solar-billing-plan.html
7 Florida Power & Light Company. Net Metering Program.
https://www.fpl.com/clean-energy/net-metering.html
8 California Energy Commission. Demand Side Grid Support Program.
https://www.energy.ca.gov/programs-and-topics/programs/demand-side-grid-support-program