Solar incentives in the USA: what’s out there and how to claim it
It’s possible to install solar panels on your property and receive money back in every state in the U.S.A. Solar power is so in demand that solar incentives are now offered by local, state, and federal governments as well as utility companies themselves.
Many kinds of solar incentives are available, and it can be hard to find them if you don’t know what you’re looking for. We created this guide to help you understand the kinds of solar incentives that exist and how to find them near you.
How much can solar incentives save you?
Solar incentives at a glance:
- Several solar incentives are available for individuals and businesses in the U.S., and incentives for solar batteries are also available.
- The three broad categories of solar incentives are tax breaks, rebates, and performance-based incentives.
- The most important solar incentive is the federal clean energy tax credit, which provides up to 30% of the cost to install solar panels back to the taxpayer in the year after installation.
- Some state and local governments also offer tax credits and exemptions to complement the federal credit.
- Rebates reduce the up-front cost of a solar installation and are usually offered by specific utilities or ratepayer-funded organizations in a state.
- Performance-based incentives are tied to how much energy a solar installation generates and are awarded to system owners over time.
Introduction to solar incentives
As the need for climate action has become ever more urgent, lawmakers across the country have stepped up to support solar power: the best form of energy generation there is (we had to say it). This support has come in many forms but is usually the result of legislative action.
Many state legislatures have passed laws called renewable portfolio standards (RPS) that require utility companies in the state to get a certain amount of the energy they sell from renewable sources. These laws often include funding for incentive programs to help home and business owners adopt solar. State public utilities commissions are often charged with designing these programs to meet the requirements outlined in the RPS law.
Solar incentives come in one of three major types:
- Tax breaks. Income tax credits are the most popular kinds of tax breaks, but state and local governments also commonly offer sales and property tax exemptions.
- Rebates. Usually offered directly to solar installers by utility companies using a pool of ratepayer funds specifically set aside to encourage solar development, rebates generally reduce the up-front cost of going solar.
- Performance payments. Performance payment programs offer a way for solar panel owners to make additional income based on the amount of energy their solar systems generate.
Here’s a bit more on each of the three main types of solar incentives:
Solar tax credits
People and businesses who purchase solar panels have long enjoyed tax credits that help ease the financial burden of going solar. Both the federal and state governments offer solar tax credits.
All federal and state income tax credits can be claimed when filing taxes in the year after installation. We’ve developed a helpful guide to claiming the federal solar tax credit using form 5695. State tax credits are usually fairly simple, and your tax software or preparer should be able to guide you through claiming them.
The federal solar tax credit
The current federal solar tax credit offers 30% of the costs of installing solar back to taxpayers in the year after the installation is completed. The federal tax credit is based on the purchaser’s income, and the credit can’t exceed the total tax owed in one year, but unclaimed credit can be carried forward to future years.
Say your solar installation costs 18,000 total. You are eligible for a federal tax credit of 5,400. Remember, the solar tax credit is non-refundable, so you can only claim the full 5,400 if you owe at least that much in taxes. If you owe less than that, you can claim the remaining tax credit value the following year.
This is where it gets complicated because the amount of tax you owe depends on your income, deductions, and other credits you qualify for.
Here’s a quick example: A married couple filing jointly with an income of 76,367, who take the standard deduction of 27,700 and qualify for no additional credits or deductions, will owe 5,400 in tax in 2023. Again, that tax changes based on whether the couple has dependents or qualifies for any other deductions and tax credits.
State tax credits
Many states also offer solar income tax credits, sometimes adding up to over half the cost of the system when combined with the federal credit.
Here’s a breakdown of the states that offer solar tax breaks, with links to each state’s incentive page on our site:
Find out what solar tax credit you qualify for
States and municipalities also offer sales and property tax exemptions for solar power. Sales tax exemptions reduce the upfront cost of going solar, and property tax exemptions prevent solar owners from paying more based on the value a solar installation adds to a property.
Tax exemptions differ from tax credits in that your eligibility is pretty much automatic if your state offers these incentives.
Your installer will take care of any necessary paperwork for sales tax exemptions, and property tax exemptions just mean the county assessor won’t be knocking on your door after you get solar installed.
States with tax exemptions
Cost of Solar Panels in Florida: Is Solar Worth It in Florida? (Solar Panel Cost in Florida)
Florida is one of the best states for you to invest in solar energy, boasting between 230-270 days of sunshine each year.
By opting for solar energy, attractive programs become available to reveal how this clean energy source can save on your electricity bills and offset the cost of solar panels in Florida.
Thanks to the incredible weather and an array of great incentives for going solar, homeowners such as you can expect your newly installed system to pay for itself within 6 to 12 years. In some cases, even sooner.
What direction should your solar panels face?
The state boasts some amazing rebate programs, as well as exempting property taxes on any added value generated from home solar and battery systems.
This means if you ever decide to sell your Florida home, all its energy savings can follow you to your next property!
Investing in a solar system in Florida is definitely worth it to go green, and to save the planet from too many carbon emissions generated from other energy-producing sources.
Cost of Solar Panels in Florida: How Much Are Solar Panels in Florida After the Federal Solar Tax Credit?
In Florida, electricity are high, and expensive utility bills are still a concern. Considering that there is so much free solar energy available every day, this shouldn’t be the case.
Solar energy can easily reduce those costs. And because of the many programs such as the federal solar tax credit and other state and local incentives, the cost to install solar panels has been placed within the reach of more consumers.
What may be causing you to hesitate is probably the general cost of a home solar system in the Sunshine State, 1 which currently stands at between 10,00 0 to 15,000.
In some cases, with fitting included, the top price can be double that. Now, depending on the firm, and the size of your solar system energy needs, the price per watt can change, and this can affect the value of your solar array system but is in the interest of the company to make their offer as irresistible as possible, if they want your business, that is.
With no money down and a promise of 12 months of free energy, some trustworthy local installers make the purchasing process even more tempting.
With a little bit of research, you will discover that the cost of a solar system can be further offset by a variety of financing options available through local companies and the state’s solar rebate programs.
You will find that the Database of State Incentives for Renewables Efficiency is a great resource to explore all of these opportunities, as well as your utility company’s website.
On it, there is a section that explains the benefits of their net metering program, and how it can work for you.
Essentially, the program permits subscribers to send any excess power generated by a solar energy system back to the grid in exchange for credits on their next utility bill.
It is highly recommended that you at least consider this option as the savings may well surprise you.
Florida’s utility networks and some electric cooperatives offer this benefit, and they should be explored first and foremost.
Local Solar Rebates Florida, Solar Rebates From the Government: Florida Solar Incentives
A little help can go a long way.
The federal solar investment credit automatically discounts 30% from new solar investments and there are a variety of Florida solar incentives that can help offset your installation costs even more.
These include sales and property tax exemptions and rebate programs that should be at the top of your to-do list.
Many of these local incentives take the form of loans, grants, or tax credits that will apply to you, and can be claimed at the time of purchase or on your tax returns.
For example, if you are eligible for the Boynton Beach Energy Edge rebate program, a possible rebate of 450,500 can be received to go towards the expense of installing a solar system that is 5kW or larger.
Panels of these sizes generally have an efficiency output of 17.5%. Yet new technologies emerging all the time will increase the efficiency and voltage output to even higher levels, 2 which will mean more power for your home.
Other local incentives include the Ocala Utility Services program and the Palm Beach County PACE financing program. One will give you the chance to claim a 450 rebate for solar water heating, while the other the choice of whether to use a low-interest loan to cover your Florida solar bill installation costs.
Florida is a great state for you to go solar for several reasons. An exemption from the state’s sales tax is a great place for you to start receiving aid with an immediate 6% saving.
On top of that the federal Solar Investment Tax Credit will apply a 30% credit to you that will cover the costs of the equipment, labor costs, and even energy storage devices like batteries; this credit comes in the form of a deduction to be claimed on your federal income tax return.
First of all, all home solar energy systems are exempt from state sales tax, saving you 6% right off the bat. The state also realizes that homes with solar energy are worth more, and exempts this value from additional property taxes.
If you are a homeowning resident in Orlando, you have the possibility to apply for a 5000,000 rebate from Orlando OUC for battery installation which has a usable capacity of 8kWh or more and also a 10-year defect warranty.
The city of Dunedin offers a similar grants program with 5000,500 up for grabs. No matter which city you live in, be sure to check with local government websites and trusted references or ask your solar installer as they keep track of all local incentives that are sometimes prone to changes, and you don’t want to miss out.
It is more than likely that your local area suppliers and utility grid will enable you to have access to other rebate programs. In Boynton Beach, for example, the Energy Edge rebate program offers up to 450,500 in solar incentives for homeowners who install energy-efficient improvements.
Other localities have utility-administered loans that offer low rates to encourage home solar installation.
Net metering is also an excellent option that can also boost the value of your solar equipment. This policy credits you for any excess electricity your system produces and allows you to sell any unused power back to the grid.
Many states have great net metering incentives that will significantly shorten your solar panel payback period.
Florida also recognizes that if your home has solar panels installed it will be worth more than those without, and Orlando Utilities offers a 5000,000 rebate for solar battery installations on residential properties.
If you have an account with and use one of the OUC-approved batteries with an energy capacity of 8kWh, 3 you will be eligible for this program that also has a 10-year defective warranty.
Depending on where you live, you may qualify for local exemptions or credits that can reduce your solar energy installation costs. For example, you as a Florida resident, can benefit from a state sales tax exemption and net metering.
In order to have control over your utility bills, net metering will enable you to send whatever excess electricity is produced by your solar panels is channeled back to the grid – and you get credited for it.
This credit can be carried over for up to 12 months before it resets on the anniversary of the annual payment cycle.
Florida Solar Panel Installation Cost (Cost of Solar Panels in Florida)
The size of your home and your electricity needs are important to determine how much you should expect your system to cost.
The larger your home, the more panels you will need to meet your yearly energy demand.
Related Reading : How Much Do Solar Panels Cost In Your State? (Hidden Fees, Tax Credits)
A larger system will also produce more energy, which results in a lower average cost per watt, which is good.
Solar panel depend on the type of cells you choose, as well as the inverter that converts the solar energy into electricity for your home.
Polycrystalline and thin-film cells are the cheapest options, while monocrystalline solar panels offer better performance and durability. 4
It can’t hurt to consider all the different types along with any additional labor fees associated with different varieties before making your final decision.
Your roof pitch and height are also significant cost factors that will impact how easy or hard it will be to install your solar panels. Typically, steeper roofs are more challenging to work on and will attract higher labor costs and require more expensive racking.
Incredibly, the price of your solar panel system can vary from city to city by as much as 20%. For example, Miami has a higher cost of living than the national average and its electricity are also higher.
Combine other expensive overheads associated with the city, and they soon all contribute to driving up the overall cost of solar panels Miami and their components.
Whether you are looking to reduce your utility bills, increase the resale value of your home or reduce your carbon footprint, going solar is an excellent option for Floridians.
The initial cost of a solar energy system can seem intimidating, but it is worth your time and energy to explore the available incentives and financing options before signing on the dotted line.
Duke Energy Solar Rebate
The Duke Energy Solar Rebate was a (highly competitive) one-time rebate available to homes, businesses, and nonprofits serviced by Duke Energy in North Carolina. This NC solar rebate concluded in January 2023 and is no longer available.
The last Duke Energy Solar Rebate began in 2018 as a result of House Bill 589, offering North Carolinians a great incentive for going solar. In total, 62 million in Duke Rebate funding was awarded to homeowners, businesses, and nonprofit organizations across North Carolina between 2018 and 2023.
Duke Energy Net Metering Changes
Starting on October 1, 2023, Duke Energy will begin phasing out the current 1:1 net metering credit system and will migrate to a new net metering program. If you go solar before October 1, you will have the opportunity to lock in the legacy net metering benefits and have more options for how you will be credited in the future.
Our solar designers will talk you through the options and help you understand what’s changing so you can make the switch to clean energy with confidence.
23 North Carolina Solar Incentives
30% Federal Solar Tax Credit
Available to homes and businesses, the Federal Solar Tax Credit is a tax credit that you can claim for installing a solar or battery system on your property and is worth 30% of system costs.
Tesla Powerwall Rebate
Each Powerwall installed between now and October 31, 2023 is eligible for a 500 rebate from Tesla.
30% Direct Pay Solar Credit
Tax-exempt, nonprofit, and government organizations can now tap into solar cost savings through a Direct Pay reimbursement, worth at least 30% on system costs.
USDA REAP Grant
The USDA REAP program provides grant funding to farms and rural businesses for solar energy systems to help permanently reduce operating expenses. When combined with other incentives, eligible farms businesses can save 70-90% on the cost of solar with a REAP Grant.
Make sure any estimate you get from your contractor is based on a realistic projection of your current and future electricity prices.
Let’s face it, installing solar isn’t just a plug and play operation. There’s a ton of things to think about before you make the sun your new best friend in the energy business. Below are some of those considerations and resources to help guide you towards the best decision for your circumstances.
Connecting to the grid
The first place to start is to make sure your property is approved to connect to the grid. Sometimes upgrades can be made but these may be cost-prohibitive. Take the time now to find out by looking up your property on our map.
Visit Energy Trust of Oregon to find a qualified trade ally contractor
Remember, only Energy Trust qualified contractors can be used to receive the incentives provided by Energy Trust of Oregon.
Energy generation and consumption
How much energy will your new solar panels generate? How will this compare with the energy you consume? These are just a couple of the many questions a qualified installer will map out for you at your specific location.
How’s your savings account looking? Purchasing solar system outright will give you the quickest payback and the highest return on investment but can be cost prohibitive. Be sure to check with your bank about available financing. Also, some installers offer financing and/or leasing options.
Avoiding sticker shock
Speaking of costs, here are some great resources to help you reduce the upfront costs of your solar system:
Energy Trust of Oregon incentives are available when you use a trade ally contractor
- In December 2020, Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in 2020-2022, and 22% for systems installed in 2023. The tax credit expires starting in 2024 unless Congress renews it.
- Expenses that are included to claim the tax credit are: solar panels/modules, contractor labor and costs, balance of systems equipment (i.e. wiring, inverters, and mounting equipment).
Oregon rebates for solar with storage
- Under the HB2618, Solar systems combined with storage (batteries) can qualify for a rebate. Rebates are on a first come, first served basis for complete applications.
- The maximum rebate that can be claimed for solar storage is 5,000 for the solar portion and maximum of 5000,500 for the energy storage portion
Solar Oregon, a solar education non-profit, offers Solar Basics workshops and an easy overview of How to Go Solar.
Solar Storage. It’s all about efficiency and peace of mind. How does it work? Simply put. when your solar system generates excess electricity, the battery stores it for later use. When your solar system isn’t producing enough electricity, it draws from your battery and/or the grid to meet the electrical needs of your home or business. A battery also allows your solar panels to power your home during an outage. (Solar alone can’t power your home in an outage.) So when you add battery storage to your solar or wind-generated power, you are more prepared for emergencies and severe weather. Similar to installing a solar system, Solar Storage systems can qualify for incentives and tax credits. Learn more about the benefit of Solar Storage and how to get started from Energy Trust of Oregon
PGE also offers a Smart Battery Pilot program that allows you to help add even more renewable energy to the grid – another win!
Other ways to support renewables
If generating your own power isn’t a good fit for you, consider PGE’s renewable power options: Green Future Choice, Green Future Block or Green Future Solar.
resources to help you understand your solar options
What Really is a Solar Panel’s Tilt & Azimuth Angle? | Online Solar Training Courses
- Energy Trust of Oregon : Financial calculators project tools. Find contractors; request bids. Cash incentives and tax credit information
- Oregon Department of Energy : State tax credits and other general solar information
- U.S. Department of Energy : Federal tax credits and other general solar information
- Solar Oregon : Free solar workshops, process overview, videos and references to Oregonians who have installed solar
- Net Metering FAQ: Billing, bundling, and other Net Metering topics