Making the switch to solar requires a significant financial investment. Fortunately, the price of doing so has become more affordable, largely thanks to lower material and labor costs.
But those aren’t the only reasons.
To encourage more people to make the switch, federal and state governments offer several solar rebates and solar incentives that further bring down costs. These government solar incentives can reduce the cost of solar panel installation significantly.
Let’s take a look at some of the most popular tax breaks, incentives, and rebates for solar panels, whether you qualify, and how much they could end up helping you save.
This investment tax credit is the most popular solar energy incentive in the US.
Unlike a tax deduction, which reduces the amount of income you pay tax on, credit reduces your income tax bill at the end of the financial year. It could also be included in your tax refunds.
Most residential solar panel installations are eligible for tax credits, provided the owner has bought the solar panel system outright rather than leased it.
As of 2022, this solar credit covers 30% of the cost of a system for residential and commercial solar installation. This includes the following expenses:
If your solar panel installation is eligible, and all required forms are filled correctly and submitted on time, this is one of the most convenient government solar programs to apply for. It will save you thousands of dollars.
Every resident of the US is eligible for the federal tax credit. And each state offers further incentives, including credits, solar panels rebates, and renewable energy certificates.
Apart from lowering costs even further, these state government solar programs encourage the adoption of solar at a local level. The programs differ depending on the state, and an informed solar panel company should be able to provide specifics depending on where you live.
The states with the most generous solar incentive programs include Texas, California, New York, Rhode Island, and Iowa. They offer tax breaks, loan programs, and grants for net metering policies.
Solar rebates can be further divided into three categories:
Solar power rebates are cashback programs that lower the cost of solar panel installation. Depending on the state, this could save you 10% to 20%.
The rebates are available for a limited period, depending on the funds allocated by the state. They are also subject to certain requirements, such as type of material, size, and companies you can work with.
Usually, this rebate is applied for by the company installing your panels, as it must include detailed information about the equipment, design, performance, and costs.
A solar panel rebate could also be offered by a local utility company, depending on how much energy your system produces. Some even provide a one-time subsidy during the installation phase.
A local solar company should be able to provide you with a more specific answer to the question: what is the rebate for solar panels?
A solar company could also offer rebates for installation as part of a promotional campaign or a seasonal offer.
Similarly, manufacturers offer rebates to anyone who uses their equipment or products in your solar system.
Most utility companies across the country now offer net metering billing arrangements. Through this program, excess energy generated by your solar panel system is sent to the local grid in exchange for credits. These credits are spent against the amount of energy you pull from the grid, thus reducing utility bills.
Some months are more conducive to solar power generation. Since more energy can be sent to the grid then, net metering allows you to benefit from round-the–year energy at subsidized rates—which, in some cases, can be as low as $0.
State governments, utility companies, and non-government climate organizations allow residents or business owners to finance their solar-powered systems at a heavily reduced interest rate.
These incentives are often available for a limited time, so consult with a solar company to check what financing programs you can be eligible for.
Some states also offer Solar Renewable Energy Certificates or SRECs. All energy produced by your system is tracked by relevant authorities, and you receive SRECs depending on solar generation rates.
These SRECs can be bought by utility companies. The money you receive in return—which can range from hundreds to thousands of dollars, depending on the state—is taxable.
Similar to SRECs, some states pay credits per kilowatt-hour of energy that your system produces. This is better known as a performance-based incentive (PBI).
While SRECs focus on the environmental impact of your solar production—taking into account factors like the reduction of emissions—PBIs are based on the actual amount of energy your solar system produces. The excess energy isn’t sold, like in the case of SRECs. Instead, this solar incentive is set when the system is first installed.
Given how many government solar incentives and solar rebates are on offer, as well as policies like the PG&E rate increase, 2023 making traditional energy sources more and more expensive, there is certainly no better time to make the switch to solar.
Use this solar panel cost calculator to learn exactly how much you could save from a robust solar system, along with solar energy incentives.
At AMECO, we have almost 50 years of experience helping residences and commercial spaces embrace more renewable energy sources. Apart from our extensive knowledge of the various solar incentive programs, we are also known for designing state-of-the-art solar systems with the right permits.
To get your solar panel installation rolling and reap its many benefits for your household or workplace, get in touch with one of our experts today.