Life After the 25D Tax Credit: The New Playbook for Residential Solar Sales

For years, the 30% federal tax credit helped make the case for residential solar a little easier. Now, that’s changed.

With the Section 25D tax credit gone, solar installers are having to rethink how they sell the value of solar to homeowners. Nine months into this new market, cracks are starting to appear.

So, what does selling solar look like without the 30% tax credit, and where should installers focus next?

The market is still adjusting

The US solar market is still changing and the numbers back this up. Wood Mackenzie expects the residential market to shrink by around 19% in 2026, and BloombergNEF puts new residential solar at its lowest level in five years, around 4.1 gigawatts for 2026. Selling is getting more expensive too: the cost of winning each new customer is up roughly 40%, from $0.60 to $0.84 per watt.

That pressure is already being felt. Freedom Forever, once the second-largest residential installer in the US, filed for bankruptcy in April 2026. This is just one of many closures across the industry since 2023.

Even batteries, long seen as the bright spot, weren’t immune. Residential storage dropped 27% year-over-year in Q2, even as commercial and utility-scale storage hit record highs. The reason is the same one behind the drop in solar installations: a rush to install before the 25D deadline, followed by a natural slowdown once it passed.

Selling value instead of a discount

Even with that dip, batteries are still one of the strongest cards installers can play in 2026. The reason people want them hasn’t changed: backup power, lower bills, and energy independence are all things a homeowner values whether or not there’s a tax credit attached.

If your team still treats the battery as an afterthought at the end of the proposal, that’s the easiest place to start. Our guide on selling batteries as part of the core offer walks through how to build storage into the conversation and close the deal.

Financing is doing more of the work

With the homeowner credit gone, financing is picking up more of the slack. Leases, PPAs, and other third-party-owned (TPO) setups can still unlock value that a straight cash or loan sale can’t, which is a big reason more Pros are leading with these options this year rather than saving them for customers who can’t pay cash.

The key is making it easy for homeowners to see what each option actually costs them. Our US Sales Toolkit covers how to lay that comparison out clearly inside a single proposal.

Soft costs are where you still have control

Hardware prices are mostly out of your hands right now. But a lot of what drives your cost per customer isn’t. Soft costs like permitting delays and design rework quietly eat into margin at the worst possible time, and cutting the software overhead in your workflow is one of the most direct ways to bring that cost down, without touching your price.

If permitting has been slowing your projects down, our look at how top EPCs hit first-submission approval rates above 90% is a good place to start.

What this means for how you sell

The installers doing well this year are the ones building a real relationship with the homeowner instead of chasing a one-off sale:

• Lead with storage, not just panels
• Offer leases, PPAs, and prepaid options alongside cash and loan
• Tighten up permitting and design to protect your margin
• Think past the install: service, monitoring, and referrals

Want to see what this looks like in practice? On The OpenSolar Podcast, Dan Johnson of Six Rivers Solar shares how his team sells value over price in exactly this kind of market.

The shift happening right now is real, but it’s just a new way of making the sale.

FAQs

Is the 25D solar tax credit really gone? Yes. The Section 25D residential tax credit ended on 31 December 2025, with no phase-out period. Homeowners who bought a system before then can still claim it on their 2025 return, but new 2026 installs no longer qualify.

Can homeowners still get any federal help with solar? Not directly, if they buy the system outright. But leases, PPAs, and other third-party-owned options can still tap the commercial credit (Section 48E) for projects that break ground before 4 July 2026, with that value passed on through pricing.

Is it still worth selling solar in 2026? Absolutely. People still want lower bills and backup power, that hasn’t changed. What’s different is the pitch: installers leading with batteries, flexible financing, and a smoother customer experience are the ones still winning deals.