Here's where things actually stand: the federal commercial solar tax credit Section 48E is still active, and it's still worth up to 30% of your project cost. What changed in 2026 isn't the size of the credit. It's the timeline and the eligibility rules around how you qualify for it.
Table of Contents
If you've heard "the solar tax credit is ending" and assumed that applies to your business, it's worth getting the details right before you make a decision either way.
What the Commercial Solar Tax Credit Actually Covers
Section 48E gives businesses a tax credit worth 30% of a qualifying solar project's cost. That's separate from and unaffected by the residential solar credit (Section 25D), which did end for homeowners on December 31, 2025. If your business is considering solar, you're not working with the same rules homeowners are, and outdated advice built around the residential credit doesn't apply to you.
On top of the base 30%, projects located in a qualifying "energy community" can receive a higher credit up to 40% in some cases. The credit can also be paired with accelerated depreciation (MACRS bonus depreciation), which further reduces the effective cost of a system in the year it's installed.
What Changed in 2026
Two things shifted this year that businesses planning solar need to understand:
The "begin construction" safe harbor deadline was July 4, 2026, and it has already passed. Projects that started construction (or locked in eligibility through a partial cost commitment) by that date preserved the full 30% credit with an extended window generally until the end of 2030 to complete the project. If your business missed that deadline, you haven't lost access to the credit, but the rules for qualifying now work differently, covered below.
New sourcing requirements (FEOC rules) now apply. Projects starting construction now need a meaningful share of their equipment costs to come from manufacturers not classified as prohibited foreign entities a list that includes China, Iran, Russia, and North Korea. This is a new layer of due diligence that didn't exist in prior years, and full federal guidance on exactly how it will be verified is still being finalized.
What This Means If You’re Planning a Solar Project Now
If your project didn't lock in eligibility before July 4, 2026, here's the practical version:
- The 30% credit is still available. You have not missed your chance.
- Your project needs to be placed in service fully completed and operational by December 31, 2027 to qualify, since the extended multi-year window only applies to projects that met the earlier safe harbor deadline.
- Your installer needs to be able to speak to equipment sourcing under the new FEOC rules, since that now affects eligibility, not just component cost.
- Timing matters more than it used to. A project that stalls or drags into 2028 risks losing the credit entirely, so working with an installer who can actually hit the completion timeline is now part of the financial decision, not just a scheduling detail.
None of this changes whether solar makes financial sense for your business; it changes how carefully the timeline needs to be planned and documented.
Frequently Asked Questions
Is the federal solar tax credit still available for businesses in 2026?
Yes. The 30% Section 48E credit remains active for commercial solar projects. What changed is the qualification timeline, not the existence of the credit.
How much can my business actually save?
The base credit covers 30% of qualifying project costs, with potential increases for projects in designated energy communities, plus additional savings from accelerated depreciation. The exact number depends on your specific project and should be confirmed with your tax advisor.
What’s the difference between the residential and commercial solar credits?
The residential credit (Section 25D) ended for homeowners on December 31, 2025. The commercial credit (Section 48E) is a separate program with its own rules and remains available to businesses, though eligibility now depends on when construction begins and how equipment is sourced.
Do I need to rush to qualify before a new deadline?
The major "begin construction" safe harbor deadline (July 4, 2026) has already passed, but that only affects the extended completion window. New projects can still qualify for the full credit if they're completed by December 31, 2027 so the relevant deadline now is your project's completion date, not a new construction start date.
Considering solar for your business?
Got Electric provides utility & commercial solar solutions across Maryland and Virginia and can walk you through what current federal eligibility rules mean for your specific project timeline. Get in touch.
With offices in Ijamsville, MD & Linville, VA, Got Electric offers residential and commercial electric work, including installation, safety inspections, repairs, lighting design, and troubleshooting.
Got Electric also specializes in solar Energy Projects. Our electricians are fully licensed by state and local jurisdiction, ensuring that your electrical projects will be installed to industry and code standards.
Energized by Auxilium Technology
