Solar Without the Federal Tax Credit: How DMV Homeowners Are Still Cutting Their Electric Bills in 2026

Almost every conversation we have had with DMV homeowners since January 1 starts with the same question: "Is solar still worth it without the federal tax credit?" It is a fair question. The 30% Residential Clean Energy Credit was the centerpiece of solar's financial pitch for almost twenty years, and as of the start of 2026, it is gone for cash and loan purchases.

Here is the honest answer, four months in: yes, solar still works for most Maryland, DC, and Virginia homeowners. But the math is different, and the financing decision is now the most important decision you make. This post walks through what changed, what did not change, and what we are actually seeing on the ground in spring 2026.

Quick Refresher: What Changed and When

The One Big Beautiful Bill, signed into law in July 2025, ended the federal residential solar tax credit (Section 25D) for systems placed in service after December 31, 2025. Homeowners who buy solar with cash or a loan in 2026 receive zero federal credit on their personal tax return.

What did not change:

• The commercial federal credit (Section 48E) remains available through 2027 for systems owned by a business
• Solar leases and Power Purchase Agreements (PPAs) qualify under the commercial credit because the system owner is a business
• Maryland and DC state-level incentives are largely untouched
• Net metering rules in Maryland and DC are intact
• SREC markets in Maryland are still functioning

What this means in practice: the federal credit is not gone for the entire industry. It is gone for direct ownership. That has shifted the financing conversation in a meaningful way.

What DMV Homeowners Are Actually Choosing in 2026

Three paths are on the table, and each one fits a different kind of household.

There is also a third path: waiting. Some homeowners are simply waiting to see if the federal credit comes back. We will not pretend to know what Congress does next. What we can say is that electric rates are not waiting. PEPCO has filed for additional base-rate increases in 2026. BGE filed in late 2025. Dominion in Virginia raised rates in early 2026. The cost of doing nothing is going up every year.

What Maryland Incentives Look Like in Spring 2026

If you do go solar this year, here is what is still on the table at the state and local level:

• Maryland Solar Renewable Energy Credits (SRECs) currently trading at $40 to $80 per megawatt-hour produced. A typical 8 kW system generates about 11 SRECs per year, worth $440 to $880 annually
• Maryland Residential and Commercial Energy Storage Grant (RCES) of up to $5,000 toward a battery, applications open through June 5, 2026
• Maryland sales tax exemption that saves about 6% on equipment costs
• Maryland property tax exemption, which protects you from property tax increases tied to solar
• 1:1 retail-rate net metering, your single largest source of long-term savings
• Montgomery County Green Bank financing with 0% interest for the first 10 years for homes in Equity Emphasis Areas, and very favorable rates elsewhere

The Maryland Solar Access Program, which paid up to $7,500 to income-eligible households, is currently closed for new applications because FY26 funding was fully reserved. We expect MEA to relaunch it for FY27 starting July 2026, but that timeline is not confirmed.

DC and Virginia Differences

DC still has the strongest residential solar economics in the DMV. The DCSEU's Solar for All program is alive, the District's net metering is generous, and DC SRECs trade much higher than Maryland's. For income-eligible DC residents, third-party-owned community solar can deliver real bill savings with zero out-of-pocket cost.

Virginia is the harder market. Net metering exists but with a lower compliance cap, Dominion's interconnection process is slower than PEPCO or BGE, and there is no robust state-level grant. We do install in Northern Virginia but the math without the federal credit is tighter than on the Maryland and DC side.

Real Numbers: What an 8 kW System Looks Like in Maryland Today

Here is a typical Aduu Solar quote for a Montgomery County or Prince George's County home in spring 2026, cash purchase:

These numbers are for a cash purchase. With a loan, payback runs longer, but monthly bill-plus-loan payment is often equal to or less than your current electric bill from day one. With a lease or PPA, you typically save 15 to 25 percent on your monthly electric cost from day one with no upfront cost.

Rising Electricity Rates Are the Quiet Story

The case for solar in 2026 is not about the federal credit anymore. It is about what your electric bill is going to look like in 2031, 2036, and 2046.

Residential electricity rates in the PJM grid (which covers most of the DMV) have risen roughly 3 to 5 percent per year over the last decade, with sharper jumps in 2023 and 2024 driven by capacity-market price spikes. Both PEPCO and BGE have indicated continued upward pressure. A homeowner paying $180 a month for electricity today is realistically looking at $290 to $340 a month in 15 years if those trends continue.

Solar locks in your electricity cost. That is the actual long-term value, and it does not depend on any tax credit.

What We Tell Homeowners Right Now

If you call us in 2026, the conversation is more nuanced than it was last year, but the bottom line is similar:

1. If your roof is solar-suitable (south, east, or west exposure with limited shading) and your annual electric bill is over $1,500, solar still pencils out for most households.
2. The right financing path depends on your tax situation, your timeline in the home, and your appetite for upfront cost. We will walk through cash, loan, lease, and PPA quotes side-by-side, and we will be honest about which one fits your situation.
3. Adding a battery makes more sense in 2026 than in 2025, both because outages have been more frequent, and because the RCES grant has become relatively more valuable now that the federal credit is gone.
4. Waiting for the federal credit to come back is a real option, but not a free one. Electricity prices keep rising whether or not Congress acts.

Bottom Line

The federal residential solar tax credit ending was a real change. It made solar more expensive for cash-and-loan buyers, it pushed a meaningful share of the market to leases and PPAs, and it stretched payback periods across the industry.

But it did not break the math. Maryland's net metering rules, the state's incentive landscape, rising electricity rates, and the simple fact that a paid-off solar system produces free electricity for another 15+ years after payback all still favor going solar for most DMV homeowners.