While federal incentives have sunset, installing residential solar panels can still make sense for a household budget — and the environment.
While federal incentives have sunset, installing residential solar panels can still make sense for a household budget — and the environment.
As the end of 2025 slipped away, so did the lucrative 30% federal income tax credits from which homeowners could benefit if they installed a solar panel system on their home. Homeowners are now faced with making the decision to go solar based on their individual ability to purchase a system and their personal belief that it is the right thing to do.
So, what are the solar panel options for homeowners in 2026?
Let’s first look at the cost of installing a solar system using a zero dollar down, 3% low interest 20-year loan. Using the U.S. Department of Energy “SunShot” solar estimator, we modeled a home in Williston with a $150 per month electric bill, a shingled roof and excellent exposure to the sun.
“SunShot” calculated the home would require a 19-panel, 7.6-kilowatt system with a cost, after any incentives, ranging from $16,000 to $20,000. The loan cost would be between $91 and $110 per month, and the new system would reduce the electric bill to $17 per month (a $133 reduction). Including a modest 3% utility inflation factor, the homeowner would see an almost $20,000 savings over the 25-year lifetime of the system. While not as good as having the previous potential 30% income tax credits, it is well worth looking into.
There is an additional benefit of solar for households that have electric vehicles and/or battery storage. Combining solar generation with battery storage can enable the homeowner to charge a vehicle and possibly reduce the peak electric load for a heat pump or hot water system. (It’s important to note that, for this article, we did not contact any local solar contractors, and costs need to be verified for your home before proceeding).
While individual tax credits for solar power installations have vanished, the July 2025 federal tax bill retained them for solar leasing. This resulted in another solar option for homeowners named “Solar as a Service” (SaaS). Using the SaaS model, the homeowner obtains the cost savings of using solar without any upfront cost or loan payment, as the solar installation company retains ownership of the solar panels. As reported by the New York Times in its Dec. 9 “Climate Forward” newsletter, SaaS is a growing option for U.S. homeowners led by the California based company SunRun.
Using the SunRun model, the company leases the product to the homeowner at a fixed price (lease payment), which includes the panels, installation and ongoing maintenance. The SaaS model has allowed SunRun to add about 30,000 installations in the U.S. in each of the last two quarters of 2025.
In a Nov. 9 article, SolarTech (Solartechonline.com) compared several options for solar, noting that SaaS contracts can run from 10-20 years with potential consumer savings of 5% to 20% when compared to utility bills. SolarTech went on to report that, globally, use of the SaaS model “reached $4.2 billion in 2024 and is projected to exceed $12.8 billion by 2030.” Their article noted that SaaS installations are currently growing annually at a rate of 25% to 35%, driven by the European and Asia-Pacific markets.
It will be interesting to see if the SaaS model takes off in Vermont.
A surviving feature of the federal “Solar for All” legislation is the Affordable Community Renewable Energy (ACRE) program, which is being endorsed by several Vermont utilities. Funding from ACRE enables a utility to develop a community solar array that will benefit income-qualified residents who would not have been financially able to install their own solar panel system. If you are interested in this program, please contact your electric utility company.
While we don’t know what electricity will cost in the future, we can be almost certain that the costs will rise. Actions by the Vermont Public Utility Commission, through its biennial review of solar net-metering rates, may affect costs in the future. We certainly believe that the U.S. solar market will continue to thrive despite the loss of individual tax incentives, and we hope that SaaS or programs like ACRE will become a common option for consumers.
As a result, the use of solar will continue to benefit homeowners by enabling them to make use of the power of the sun.
To participate in Williston’s energy future, reach out to your Williston Energy Committee at energy@willistonvt.org or attend a public meeting held on the second and fourth Wednesday of each month. The agenda for upcoming meetings is posted on the Town of Williston website (www.town.williston.vt.us). For more information, visit https://www.willistonvtenergycommittee.org.
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