Incentives And Rebates For Solar Energy

While solar panels have become much more affordable over the past decade, they are still a big investment for homeowners and business owners hoping to reduce their electricity bills. Putting solar panels on your roof and powering your home with renewable energy is now more affordable and accessible than ever thanks to incentives provided by the federal government, state and municipal governments, and even certain utilities. Solar rebates, tax benefits, and performance-based incentives can lower your solar system’s initial investment by as much as half the whole price!

Financial Incentives And Rebates For Solar Panels

Incentives For Solar Energy Investments

The federal investment tax credit (ITC) is, by a significant margin, the most beneficial incentive for solar energy. The Investment Tax Credit allows you to deduct 30 percent of the total cost of your solar energy system from your taxable federal income.

A tax credit, as opposed to a deduction, which lowers the amount of income that is subject to taxation (this is the result of any donations of money or goods to charity that you make throughout the course of the year), directly reduces the amount of tax that you would have otherwise owed.

In other words, rather than merely being taxed on a lesser income, the federal ITC offsets what you actually owe in taxes, and it can even come back to you as a refund from the IRS if you’ve overpaid your taxes during the year. However, the federal ITC cannot exceed what you owe in taxes.

State Tax Credits

Some states provide additional tax credits for the installation of a solar photovoltaic panel system. These credits operate in a manner very similar to that of the federal ITC, except they apply to your state taxes rather than your federal taxes.

These sums can be rather substantial, especially when combined with the federal ITC, although they differ substantially from state to state.

Cash Back Incentives

The installation of a solar panel system may qualify for rebates or tax credits from some states, municipalities, and utility companies. Solar rebates are often only offered for a set period of time and are removed from the market once a predetermined volume of solar energy equipment has been installed in a particular region.

In most cases, solar subsidies can further cut the expenses of your system by between 10 and 20 percent.

Certificates For Renewable Solar Energy

A growing number of jurisdictions have recently adopted policies known as “renewable portfolio standards,” which mandate that utilities source or create a set percentage of their electricity from renewable resources such as solar power.

If you live in one of these states, the amount of power generated by your solar panel system will result in the creation of solar renewable energy certificates (SRECs). These certificates can be sold for cash. Given that each SREC is a representation of the environmental qualities generated by your solar power, utilities acquire your SRECs as a means of complying with state-level regulations for renewable energy.

Depending on the SREC market in your state, the sale of your SRECs could result in an increase in annual income of hundreds, or even thousands, of dollars.

Performance-Based Incentives

Another typical kind of solar incentive program is called a performance-based incentive, or PBI for short. This kind of program gives you a credit depending on the amount of electricity that your system generates in kilowatt-hours.

PBI programs are somewhat distinct from SREC programs in one significant respect: whereas SRECs reflect the environmental benefits of solar generating (i.e., emission reductions), PBI programs provide an incentive for the electricity produced itself (i.e., the kilowatt-hours of production).

This is the primary distinction between the two types of programs. PBIs, in contrast to SRECs, are not required to be sold through a market, and incentive rates are decided upon when the system is actually being implemented. PBIs are able to either take the place of net metering rules or coexist with them.

Solar Benefits For Businesses: Accelerated And Additional Depreciation

This incentive is perfect for you if you own a company and are considering installing solar panels on your roof. The Modified Accelerated Cost Recovery System (MACRS) allows businesses to write off the value of their solar energy system thanks to accelerated depreciation.

This minimizes the amount of tax burden that businesses are required to carry and accelerates the return on investment that may be obtained from solar energy. A cost recovery term of up to five years may be available for qualifying photovoltaic (PV) equipment purchases.

An additional 30 percent off of the total net cost of the system can be saved through the use of accelerated depreciation.

It is important to note that certain states also give their own MACRS tax benefit to businesses that purchase solar energy systems. This benefit can further reduce your tax burden and shorten the amount of time it takes for your investment to pay for itself.

Subsidized Loans

It’s possible that you could get a subsidized solar loan with a lower interest rate in order to pay for the purchase of a solar panel system to power your home. Your state, a non-governmental organization, or even the firm that provides your utilities may be the source of these loans; however, in most cases, they are only available for a set period of time.

Tax Exemptions

There are several states and municipalities that do not factor the value of solar panel systems into the overall assessment of a property’s market value. This indicates that even though the installation of a solar power system has improved the value of your property (by an average of four percent! ), your property tax payment will not increase because the value of your property has increased; rather, it will remain the same.

In addition, the solar panel system you purchase might not be subject to the sales tax that your state levies, which, depending on the rate of sales tax in your state, might result in considerable additional cost savings.

Can You Get Solar Incentives Even If You Don't Own Your System?

Your eligibility will be determined by whether or not you own the solar panel system that is installed on your property. You may be eligible to get tax credits, solar rebates, and SRECs for the solar energy system you install if you buy it outright or finance it through a solar loan. On the other hand, if you lease your system, the third-party owner will be eligible for all of the financial benefits associated with solar energy.

Rebates And Incentives For Solar Energy, Organized By State


Incentives and rebates for solar energy have proven to be effective in promoting the adoption of solar power. Governments, utility companies, and other organizations offer a range of financial incentives to encourage homeowners and businesses to invest in solar energy systems.

These incentives not only help offset the upfront costs of solar installations but also reduce energy bills, increase property values, and contribute to a more sustainable future. As solar technology continues to improve and the demand for renewable energy grows, it is likely that incentives and rebates for solar energy will become even more prevalent and accessible to a wider range of consumers.

At Sun Services USA, we take care of every step of the process, from the initial site survey through the engineering design, utility applications, and installation! Even if there are no major developments, we will continue to check in with you once a week to ensure that you are kept in the loop. Please do not hesitate to get in touch with our staff if you have any questions or require assistance.