Buyer's guide

Solar and batteries in 2026, after the credit

The 30% federal credit ended on 31 December 2025. That raises effective system cost by about 43%, and most of the payback maths you'll read online hasn't caught up.

What changed

The Section 25D Residential Clean Energy Credit — 30% of system cost, uncapped, covering solar, battery storage, geothermal heat pumps, small wind and fuel cells — terminated for property placed in service after 31 December 2025.

The arithmetic is worth stating plainly. A $30,000 system used to cost $21,000 after the credit. It now costs $30,000. That is not a 30% increase in what you pay — it is a 43% increase, because the credit was calculated off the gross price and you now bear all of it.

Every payback calculation published before 2026, and a great many published since by sites that have not updated, is wrong by that margin. If a quote or a calculator shows you a post-credit number, it is describing a world that no longer exists.

What this does and does not change

It does not change the physics. A good panel still produces the same electricity. If your utility rate is high, self-generation still displaces expensive power.

It does change the ranking of options. Three things move:

Premium panels get harder to justify. When 30% of the premium was federally subsidised, the step up from a mainstream module to a top-tier one was easier to swallow. Now it is fully out of pocket. Unless your roof area is genuinely constrained — in which case efficiency buys you capacity you cannot otherwise have — the cost-per-watt argument for mainstream modules got considerably stronger.

Third-party ownership deserves a fresh look. Leases and power purchase agreements are financed differently from cash purchases and are affected differently by the credit's expiry. The comparison that used to favour buying outright is no longer obviously settled. Get both quoted.

Batteries bought purely for arbitrage got much harder to justify. A battery that pays for itself by charging cheap and discharging expensive was already a long payback in most rate structures. Removing 30% of its cost from the equation stretches that considerably. Batteries bought for resilience — so the well pump and the freezer keep running when the grid drops — are a different purchase, and that reasoning is unaffected. Be honest with yourself about which one you are making.

What actually determines your solar economics

Not the panel. In rough order of impact:

Your utility's export compensation. What you get paid for electricity you send back is the single biggest variable, and it varies from full retail net metering to a few cents per kWh. States have been steadily moving away from full net metering. Find out what applies to you, and whether new customers get grandfathered on the current terms.

Your rate structure. On a time-of-use rate, when you produce matters as much as how much. This is where a battery earns its keep, and it is where a panel's temperature coefficient becomes financially relevant — hot afternoon output is worth more per kWh.

Your roof. Orientation, pitch, shading, and remaining roof life. Installing solar on a roof with eight years left in it means paying to remove and reinstall the array. Do the roof first.

Then the equipment.

Reading panel specifications

Efficiency matters when roof area is the binding constraint. If you can fit every panel you need, a 22% module and a 24% module produce the same electricity for you — the 24% one just does it on fewer square feet. Pay for efficiency when you are short of roof, not otherwise.

Temperature coefficient is underrated. Panels are rated at 25°C cell temperature and spend hot afternoons far above it. A coefficient of -0.24%/°C versus -0.35%/°C is a meaningful production difference in a hot climate, concentrated in exactly the hours when time-of-use rates peak. In a cool climate it barely registers.

Degradation compounds. The difference between 0.25%/yr and 0.40%/yr is roughly 4% of output by year 25. Real, but smaller than most marketing implies.

Warranty term ranges from 25 to 40 years. Read what is actually warranted — product defects, power output, or both — and by whom. A 40-year warranty is worth what the company backing it is worth in 40 years.

Sizing a battery: power first, energy second

Almost every battery is marketed on kWh. During an outage, what stops you is kW.

A well pump starting, a heat pump compressor, an electric range — these draw hard instantaneous power. A battery with 15 kWh of capacity and 3.8 kW of continuous output will run your lights and refrigerator for a long time and will not start your well pump.

Work out which circuits you actually want backed up, add their simultaneous draw with a margin for starting surges, and size continuous output to that. Then check the capacity is enough to carry those loads through a realistic outage.

Modular systems let you start small and add units, at the cost of needing several units to reach the continuous output one large battery delivers. Single large units give you the power in one box, with no redundancy if it fails. Neither is wrong; they are different bets.

What to ask an installer

• What export compensation will I receive, and for how long is it guaranteed?
• Is this quote before or after any federal credit? (There is no federal credit. The answer

tells you whether they are current.)

• What is the production estimate, and what modelling tool produced it?
• What happens to this array when I replace the roof?
• For batteries: what continuous kW does this provide, and which specific circuits will it

carry?

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