The Solar Rules Have Shifted

The solar landscape just changed dramatically, and it may work in your favor. The 30% federal solar tax credit for homeowners ends after December 31, 2025. That deadline feels big, and it is, but it doesn’t mean the door to solar savings has closed. Homeowners can still benefit from federal support in 2026 and beyond with Power Purchase Agreements (PPAs) and leases. 

For many families, this next phase of solar policy may actually make things easier. Instead of needing to buy panels outright, homeowners can access clean power at lower, more predictable rates without paying tens of thousands of dollars upfront.

Our role is to make sense of all this change, explain your options clearly, and walk alongside you as you decide whether a PPA or another solar path is the right fit for your home. We’re here to answer questions, clear up the complex parts of solar policy, and make sure you feel confident in your choice.

What’s a Power Purchase Agreement?

A PPA is a straightforward way to go solar without the complexity of ownership. 

Here’s how it typically works:

• The third-party owner (TPO) owns the system. They install and maintain the whole solar system.  
• You buy the electricity. Instead of purchasing panels, you pay for the power they generate at a lower rate than your utility.
• You skip the headaches. No upfront cost, no responsibility for repairs, and no worrying about system performance.
• Contracts are flexible. Most run 20–25 years, with options to buy out or transfer to new owners if you sell your home.

Think of it like subscribing to clean energy from your roof. You get the benefits of solar without the hassle of ownership, and the TPO has every incentive to keep your system performing at its best.

Why 2026 Is the Sweet Spot for PPAs

The expiration of the 30% residential tax credit may feel like a setback, but PPAs keep the value of federal incentives within reach. After December 31, 2025, homeowners who purchase their systems outright can no longer claim the tax credit. This makes 2026 a huge turning point. Beginning next year, federal support for residential solar will come through Section 48E (the commercial tax credit), meaning solar developers can still claim the 30% tax credit on third-party-owned systems through 2027. The developer then uses these tax savings to offset their project costs and pass those savings along to you in the form of lower electricity rates.

For many households, this creates a timely opportunity. Instead of covering the full upfront cost of a system, a PPA gives you access to clean energy, predictable bills, and the indirect benefit of federal support, without the need to file for tax incentives yourself.

Solar developers now have some new requirements to navigate in order to pass these tax credit benefits along to homeowners. Projects starting on or after July 4, 2026, must be completed by the end of 2027, and developers need to use more domestic equipment. As a homeowner, you won't need to manage these details, but they could impact how quickly projects get scheduled.

You may also start hearing about prepaid PPAs (or leases). This option lets you pay a lump sum upfront to cover years of solar power at a discounted rate that factors in the tax credit. Prepaid PPAs are still fairly new, but they're likely to become more common as the solar landscape shifts. As this option becomes more established, we'll be here to help you understand if it's right for your home. 

Key Deadlines to Know

• December 31, 2025: Last day to install and pay for a purchased system in order to qualify for the 30% residential tax credit (25D).
• July 2026: Deadline to begin construction on third-party-owned systems under 48E.
• December 31, 2027: Final deadline to complete systems under the 48E credit.

These dates mark the transition from homeowner-owned incentives to developer-owned incentives, which is why timing matters if you are exploring solar.

Benefits of PPAs

Financial Savings

A PPA gives you access to clean energy at a price lower than your utility, without having to cover the full system cost upfront. Savings begin right away, and predictable pricing helps shield you from future rate hikes.

Hands-Off Convenience

Since the third-party owner (TPO) owns the system, they typically handle monitoring, maintenance, and repairs. No need to worry about inverter replacements, panel cleaning, or performance issues. You simply enjoy the power without the stress of upkeep.

Peace of Mind

Because third-party owners depend on strong system performance, PPAs often include production guarantees. This means they are motivated to keep your system running efficiently, so you can feel confident your home will stay powered.

Flexibility

Most contracts allow you to transfer the agreement if you sell your home, keeping the process simple. In many cases, early buyout options are also available if you want to change course later.

How to Decide if a PPA Is Right for You

Exploring a PPA starts the same way as any solar project. First, take a look at your household’s energy use, the condition of your roof, and your long-term plans for the home. From there, it helps to compare the different financing paths available: purchase, lease, or PPA, and see which one feels like the best match for your budget and goals. If you’d like more details on those options, you can check out our guide on how to pay for solar panels.

A PPA can be a great fit if you want to avoid a large upfront investment, prefer predictable monthly payments, or like the idea of having experts manage the system for you. If long-term ownership and building asset value matter more, then buying may still make sense, even without the tax credit. 

The Bottom Line 

The tax credit as we know it may be going away, but clean energy and savings are still within reach. At Citadel, our goal is to educate and empower our customers. We are here to share the options, explain them clearly, and help you find the fit that makes the most sense for your home.

With more than 30 years in roofing and over 20 years in solar experience, we're California's #1 solar provider by kilowatts installed and have earned the trust of our community with more than 600 five-star reviews. 

When you are ready to explore your options, whether you're thinking of purchasing or want more details about PPAs, our team is here to guide you through the process and make going solar simple. 

Contact us today for a free consultation and discover which path works best for you.