Solar Incentives by State
Do-It-Your-Way Solar Guide
- Pros, Cons, and Costs
- Pros and Cons of Solar
- Are Solar Panels Worth It?
- Solar Panel Cost Calculator
- Solar Panels ROI
- Federal Solar Tax Credit
- State Solar Incentives
- Solar Lease Guide
- Should You Lease Solar?
- Do Solar Panels Increase Home Value?
- Community Solar
- Sun Hours Map
- Solar Electrical Requirements
- Solar Permitting
- Net Metering Guide
- System Design
- Grid-Tied vs. Off-Grid
- How to Size Your Solar System
- Solar Panel Efficiency
- 60 Cell vs. 72 Cell Solar Panels
- Monocrystalline vs. Polycrystalline Solar Panels
- Best Solar Panels
- Microinverters vs. String Inverters
- Best Grid-Tied Inverters
- Ground Mount vs. Roof Mount Racking
- Best Solar Panel Mounts
- Lead-Acid vs. Lithium Batteries
- Best Solar Batteries
- Step-by-Step DIY Solar Installation
- Part 1: Planning & Safety
- Part 2: Wiring & Electrical
- Part 3: Mounting Your Panels
- Part 4: Battery Installation
- Monitoring & Maintenance
- Best Solar Panel Monitoring
- Solar Panel Maintenance Cleaning
Though solar has gotten cheaper and more efficient over the years, it still represents less than 2% of all electricity generated in the United States.
Because solar is cleaner and more sustainable than fossil fuels, there are several government incentives in place to encourage its adoption. These programs come in several forms, including solar rebates, tax credits, subsidies, and low-interest loans for renewable energy projects.
Regardless of what form it takes, all of these programs are designed with one purpose in mind: to encourage more people to go solar.
If you’re thinking about making the switch to solar, these programs can dramatically reduce your project costs and speed up the payback period for your investment.
Pick a state below to browse solar incentives by state.
Federal Solar Investment Tax Credit (Solar ITC)
The Solar ITC is available to all residents of the United States who owe federal taxes. Under the program, a portion of your solar installation costs can be claimed on your tax return, reducing the amount you owe when you file your federal taxes that year.
The credit is worth 26% of your project costs in 2022. It drops to 22% in 2023, then expires for residential projects at the start of 2024.
The Solar ITC is a major incentive for going solar that most Americans are eligible to claim. On a $10,000 solar project, the credit would put $2,600 back in your pocket, significantly speeding up your payback period.
Read our quick primer on the federal solar tax credit for more info.
Solar Panel Incentives By State
On top of the federal incentive, there are also state and city-level programs available to encourage solar adoption on a local level.
In almost all cases, state and local programs stack with the federal incentive, so you get to double-dip on your savings.
Local incentives can be quite lucrative, so be sure to do your research to take full advantage of the programs available to you.
Types of Solar Incentives
Solar incentives come in many different forms. Here are a few common programs:
A portion of your project costs can be deducted from your tax obligation, reducing the amount of taxes you pay when you file. In addition to the federal ITC available to all Americans, some states have their own state solar tax credit in place.
A partial refund returned to the owner after they buy their system. Typically, this involves buying from a solar vendor, then filing for a rebate with the utility company, local government, or other organization running the rebate program.
Loans with below-market rates for renewable energy projects. These loans are offered at a reduced interest rate to encourage people to invest in energy-efficient improvements to their home.
Property Tax Relief
In some states, solar systems are exempt from property taxes. The home is assessed as if it did not have a solar power system installed, reducing the homeowner’s tax burden.
In participating states, homeowners get credits for the solar power they generate, called SRECs (Solar Renewable Energy Certificates). They can then sell these credits to utility companies through a local marketplace.
Utility companies buy SRECs to satisfy their Renewable Portfolio Standards (RPS), regulations which outline how much of a utility provider’s electricity comes from renewable sources. If they don’t generate enough renewable energy on their own, they can buy SRECs from independent producers to satisfy their solar quota.
An SREC can be worth anywhere from $5 to $450 depending on supply and demand within a local marketplace, so the value of this incentive can fluctuate wildly depending on where you live.
Performance-Based Incentives (PBIs)
A performance-based incentive (PBI) is an incentive that awards a flat-rate payout for every kWh of solar energy generated. PBIs are governed by your net metering agreement with your utility company.
Can I Claim Incentives If I Sign a Solar Lease / PPA?
No. Under solar leases and PPAs, the solar installer owns the system, renting out the power it produces. As the owner of the system, the installer is entitled to claim any available solar incentives for themselves.
Missing out on solar tax credits and incentives puts a major dent in the ROI of your solar panel system. To maximize your energy savings, we recommend buying over leasing if the option is available to you. Learn more in our article: “Is leasing solar panels worth it?”.
How Much Does It Cost To Go Solar?
Considering solar for your home or business? Get a quick and easy solar panel cost estimate with our simple solar calculator.
Answer a few questions to get a tailored solar estimate based on your location and energy usage. The calculator takes the federal tax credit into account (though you’ll need to locate your local incentives using the database above). We’ll also highlight a few solar kits in our shop that match your needs.