These 34 States Offer Incentives To Go Solar

Solar energy is on the rise around the United States, as both federal and state governments see the advantages of providing incentives for homeowners to purchase and install solar panels on their properties. The 34 states in this gallery include a variety of solar incentives, many of which vary from state to state and even can be specific to certain counties, cities or regions.

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Using Energy Sage’s state-by-state data on solar rebates and incentives, GOBankingRates determined that almost every state on this list offers two key incentives — net metering programs and a federal solar tax credit. Net metering is a program where homeowners whose systems produce more energy than they use can sell that energy back to their utility for credits that can be redeemed later when a system isn’t generating as much power. The federal solar tax credit allows homeowners and businesses to write off 26% of their solar costs from their taxes.

Other state-by-state incentives include cash rebates, state tax credits for installation of solar panels and solar renewable energy certificates (SRECs). Check out the solar incentives in these 34 states.

Last updated: April 6, 2021

Arizona

In addition to the federal solar tax credit, Arizona residents have these incentives:

• Residential Arizona solar tax credit: The residential Arizona solar tax credit reimburses residents 25% of the cost of your solar panels, up to $1,000, which comes off your taxes in the year you install the system. The system has to be new and comply with relevant performance and safety standards and carry a minimum two-year warranty on collectors, heat exchangers and storage units.

• Solar equipment sales tax exemption: In Arizona, due to the solar equipment sales tax exemption, residents do not have to pay sales tax on their system.

• Energy equipment property tax exemption: This exemption makes sure that residents don’t pay any additional property taxes related to the value added by solar panels.

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California

In addition to the federal solar tax credit and net metering, California residents have these incentives:

• Local solar rebates: In certain parts of California, homeowners can take advantage of rebate programs that pay for solar either a flat fee of $500 or $0.95 per watt of installed capacity. One example is the Rancho Mirage Energy Authority, which pays a $500 rebate to cover the permit fee. Check with your local utility.

• The Disadvantaged Communities — Single-family Solar Homes (DAC-SASH): This program offers rebates to single-family homeowners installing solar panels with income eligibility. Homeowners must be customers of Pacific Gas and Electric (PG&E), Southern California Edison (SCE) or San Diego Gas and Electric (SDG&E).

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Colorado

In addition to the federal solar tax credit and net metering, Colorado residents have these incentives:

• Local solar rebates: Many Colorado utilities and local organizations offer rebates for installing solar on your property. One such example is EnergySmart Colorado, which offers rebates ranging from $400 to $3,000, depending on where you live.

• Sales and use tax exemption for renewable energy equipment: Colorado provides a big incentive to homeowners by not taxing the physical equipment of solar panels or solar systems.

• Property tax exemption for residential renewable energy equipment: Colorado homeowners will not pay any additional taxes on the increased value of your house as related to the addition of solar panels.

• Colorado community solar: For those who do not own their own home, or don’t have a roof that can accommodate solar, Colorado is beginning to offer community solar, an off-site solar array that interested parties can subscribe to.

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Connecticut

In addition to the federal solar tax credit and net metering, Connecticut residents have these incentives:

• Residential Solar Investment Rebate Program: This rebate, administered by the Connecticut Green Bank, pays $0.463 per watt of solar installed (up to 10kW). A homeowner who purchases a 5kW system would receive $2,315.

• Energy Conservation Loan Program: The government of Connecticut offers a low interest loan for eligible families to purchase a solar system. You may borrow up to $25,000 for 10 years at interest rates between 0% and 6%.

• The sales and use tax exemption for solar and geothermal systems: Connecticut does not tax new solar panels. This means that you won’t have to pay any taxes on the purchase of your system.

• Property tax exemption for residential renewable energy equipment: This incentive means homeowners will not pay any additional taxes on the increased value of your house as related to the addition of solar panels.

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Delaware

In addition to the federal solar tax credit and net metering, Delaware residents have these incentives:

• Solar Renewable Energy Certificates (SRECs): Through this program, Delaware residents can sell the SRECs that their systems generate. Based on 2016 rates, a 5 kilowatt (kW) system that generates 5 MWh per year could make an extra $2,500 over its life from selling credits.

• Utility solar rebate programs: The state itself doesn’t offer a tax credit or rebate for going solar, but many of the electric utilities in the state do, including:

  • Delmarva Power and Light: These customers in Delaware may earn a cash rebate to reduce the cost of solar installation. Delmarva will pay $0.55 per watt of solar generating capacity up to 5kW, and $0.20/W beyond 5kW.

  • Delaware Electric Cooperative: Customers can receive $0.85/W of solar power installed (up to 5kW), and $0.25/W for any additional solar capacity.

  • Delaware Municipal Electrical Corporation (DEMEC): The Municipal Green Energy Program pays customers of qualifying Delaware municipal utilities a cash rebate for a portion of their solar installation costs. The value of the rebate depends on where you live, so review the program websites for specifics.

See: What Would Converting America to Entirely Renewable Energy Cost?

Florida

In addition to the federal solar tax credit and net metering, Florida residents have these incentives:

• Florida’s property tax exclusion for residential renewable energy property: This incentive means homeowners will not pay any additional taxes on the increased value of your house as related to the addition of solar panels.

• Solar and CHPS sales tax exemption: Florida homeowners will not have to pay sales tax on the purchase of a new solar energy system. This saves you 6% on the cost of a system.

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Georgia

Georgia’s offers include:

• Georgia net metering: If your system produces more energy than you can use, Georgia’s net metering policy will credit you for that extra electricity and allow you to use those credits when your system doesn’t generate enough power. In Georgia, participating utilities will measure the amount of excess solar electricity you put on the grid and pay you a rate set by Georgia’s Public Service Commission. The rate is what the utility would have to pay to power generators if they had not purchased it from you. In 2016, for example, the going rate was between $40 and $60 for each megawatt hour (MWh). Georgia Power is one utility offering a net metering program in Georgia.

• The federal solar tax credit: This federal tax incentive allows Georgia residents to reduce the cost of their energy system by 26%. However, it only applies to those who buy their PV system outright.

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Illinois

In addition to the federal solar tax credit and net metering, Illinois residents have these incentives:

• ComEd commercial solar rebates: ComEd, one of Illinois’ largest utility companies, provides rebates for installation costs to commercial and industrial customers. Additionally, ComEd customers who install solar on a business are eligible for $250 per kilowatt of installed solar power for systems 2,000 kW or smaller.

• Special assessment for solar energy systems: This ensures Illinois residents will not be taxed on solar panels.

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Indiana

In addition to the federal solar tax credit and net metering, Indiana residents have these incentives:

• Solar easement laws: Indiana’s solar easement and rights laws help homeowners keep their solar installations free of shade structures that could encroach on your solar power generation. Additionally, these laws ensure that planning and zoning authorities cannot block your home solar panel installation.

• Renewable energy property tax exemption: Homeowners will not pay any additional taxes on the increased value of your house as related to the addition of solar panels.

• Indiana sales tax exemption: In Indiana, many of the components of a solar energy system are free from sales tax, including solar modules, racking and inverters because they are directly involved in the production of electricity.

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Iowa

In addition to the federal solar tax credit and net metering, Iowa residents have these incentives:

• Solar easement laws: Iowa’s solar easement and rights laws help homeowners keep their solar installations free of shade structures that could encroach on solar power generation. Some cities, towns and municipalities in Iowa also have strict rules that make sure HOAs can’t prevent you from installing solar panels.

• Iowa residential solar tax credit: In Iowa you can get 15% of the cost of a solar system back on your Iowa state income tax when you install a solar panel system at your residence. This credit caps out at $5,000 maximum.

• Renewable energy property tax exemption: Iowa homeowners will not pay any additional taxes on the increased value of your house as related to the addition of solar panels.

• Iowa sales tax exemption: You won’t pay any sales tax for your solar equipment in Iowa, saving you 6% on your purchase price.

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Louisiana

In addition to the federal solar tax credit and net metering, Louisiana residents have this incentive:

• Home Energy Loan Program (HELP): Homeowners who buy a solar energy system or improve energy efficiency on your property may be eligible for a low-interest home energy loan from the Louisiana Department of Natural Resources.

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Maine

In addition to the federal solar tax credit and net metering, Maine residents have these incentives:

• PACE loans: The state of Maine helps prospective solar buyers finance their purchase with a Property-Assessed Clean Energy (PACE) Loan. Buyers do not have to put any money down, and instead of monthly loan payments, you repay through an annual assessment on your property taxes. Consumers can receive up to $15,000 for 15 years at a 4.99% interest rate.

• Community solar in Maine: Maine encouraged unique ways to go solar, such as their “community shared solar” model, which allows Maine residents to buy into larger, shared solar installations. This would allow residents to benefit from solar without putting solar panels on their roofs.

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Maryland

In addition to the federal solar tax credit and net metering, Maryland residents have these incentives:

• Residential clean energy grant program: For Maryland residents who install a solar energy system, this clean energy program will pay you $1,000. Your system must be smaller than 20 kilowatts, located at your primary residence and the installer must have a standard NABCEP certification.

• Solar Renewable Energy Certificates (SREC): Maryland is offering an incentive to homeowners as part of a goal to produce 2.5% of its electricity from solar resources. Under this program, you can receive one Maryland SREC for each megawatt-hour of clean electricity your panels produce, which you can then sell in the SREC market.

• Property Tax Exemption for Solar and Wind Energy Systems: Maryland residents will not have to pay any taxes on the increased value of their homes when they add solar.

• The Sales and Use Tax Exemption for Renewable Energy Equipment: This exemption gives residents a tax break on their purchase of their new solar energy system.

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Massachusetts

In addition to the federal solar tax credit and net metering, Massachusetts residents have these incentives:

• Residential renewable energy income tax credit: This credit offers the owner of renewable energy systems a tax credit of 15% of the system. Maximum $1,000 credit.

• Solar Massachusetts Renewable Target (SMART): Through this incentive, the state of Massachusetts pays Eversource, National Grid and Until customers a fixed rate per kilowatt hour of solar energy produced during a 10-year period. For systems under 25 kilowatts, the rate ranges from 29 to 31 cents per kWh, depending upon location and utility. The state also provides higher incentive rates for low-income customers or any who install battery storage in addition to a solar panel system.

• Mass Solar Loan program: This state-level incentive offers fixed, low-interest loans to urge homeowners to purchase their solar panels rather than leasing them.

• Renewable energy property tax exemption: This incentive means homeowners will not pay any additional taxes on the increased value of your house as related to the addition of solar panels.

• Massachusetts sales tax exemption: In Massachusetts, you won’t pay sales tax on the physical components of solar energy system.

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Michigan

In addition to the federal solar tax credit and net metering, Michigan residents have this incentive:

• Michigan Saves Home Energy Loan Program: This unique loan program gives homeowners the opportunity to upgrade their home’s energy efficiency with loans up to $30,000. Annual percentage rates for this loan can be as low as 4.99% depending on credit score, with a maximum of 6.99%.

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Minnesota

In addition to the federal solar tax credit and net metering, Minnesota residents have these incentives:

• Sales tax exemption: Minnesotans don’t have to pay any sales tax on their solar purchases, a savings of nearly 7%.

• Xcel Energy Program: The Minnesota Renewable Development Fund offers solar homeowners in Xcel Energy’s service area an annual payment based on how much their solar system produces. Xcel pays homeowners $0.08 per kilowatt-hour of solar power production every year for up to 10 years.

• SolarSense: If you’re a lucky recipient of this lottery-based rebate, Minnesota will cover almost all of your solar installation. SolarSense pays up to 60% of installation costs for any qualified solar homeowner who is also a customer of the utility Minnesota Power.

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Missouri

In addition to the federal solar tax credit and net metering, Missouri residents have these incentives:

• Columbia Water & Light solar rebate: This incentive encourages utilities to meet a certain Renewable Portfolio Standard (RPS) and urges Missouri homeowners to go solar. This program offers customers of Columbia Water & Light who are also homeowners a payment of up to $625 per kilowatt of solar power generation capacity (up to 10kW). There are other rebates for larger system sizes.

• Kansas City Power & Light solar rebate: Households that participate in Kansas City Power and Light’s net metering program can receive a rebate payment of up to $1 per watt of solar power installed on their home.

• Empire District Electric solar rebate: Empire District Electric offers eligible customers a solar rebate of up to $2 per watt, depending on the solar installation date and rebate application date.

• Amaren Missouri’s Solar PV Rebate Program: Amaren customers are eligible for a rebate from your utility when you install a solar panel system. Rebates values vary depending upon the size of the system and installation type. Customers can receive $0.25 per watt for installing solar panels – for an average 8 kilowatt (kW) system,which averages $2,000 in savings. The incentive has a cap of 25 kW for residential customers, and 150 kW for commercial or industrial customers.

• Solar property tax exemption: Missouri homeowners do not have to pay property tax increases related to the increased value of adding solar panels.

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Nevada

In addition to net metering and the federal solar tax credit, Nevada residents have this solar incentive:

• Solar access rights: This law protects Nevada homeowners’ right to install solar panels. It even enables you to engage a solar easement with your neighbors to ensure the panels have good access to sunshine.

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New Hampshire

In addition to net metering and the federal solar tax credit, New Hampshire residents have these solar incentives:

• Small PV systems program: New Hampshire homeowners with a solar system size of 10 kilowatts (kW) or less can take advantage of this program for small residential solar. Consumers will receive either $0.20 per watt (up to $1,000) or half the cost of the system.

• Local property tax exemption: No New Hampshire homeowners or businesses have to pay property tax increases related to the value of their solar energy system.

• New Hampshire Low-Income Energy Assistance Program (LIHEAP): This program is designed to help low-income homeowners finance a solar energy system.

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New Jersey

In addition to net metering and the federal solar tax credit, New Jersey residents have these solar incentives:

• Transition Renewable Energy Certificates (TRECs): Solar energy systems in New Jersey also produce TRECs, which can be sold back to utilities to help the state meet New Jersey Renewable Portfolio Standard (RPS). Rates vary depending on systems, but for rooftop or ground-mounted solar panel systems, consumers can earn $91.20 per TREC.

• Property tax exemption: New Jersey residents do not have to pay additional property taxes related to the increased home value of installing solar.

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New Mexico

In addition to net metering and the federal solar tax credit, New Mexico residents have these solar incentives:

• Sustainable building tax credit: The New Mexico state government will credit up to $6.50 per square foot on your income taxes for installing solar. Home must be a certified sustainable home by the U.S. Green Building Council.

• El Paso electric renewable energy certificate purchase program: Consumers of this utility can earn you can earn $0.02 per kilowatt-hour of electricity generated by solar panels.

• Property tax exemption for solar: New Mexico residents won’t pay extra property taxes related to their solar energy systems.

• New Mexico state solar tax credit: This incentive will offer a state tax break of up to $6,000 or 10% off your total solar energy expenses (whichever is lower).

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New York

In addition to net metering and the federal solar tax credit, New York residents have these solar incentives:

• The Megawatt Block Incentive Structure: The program provides a cash upfront dollars-per-watt ($/W) rebate for commercial and residential solar panel systems. Subsidies vary depending on how much energy is produced in your area.

• New York state solar equipment tax credit: This tax credit enables residents to deduct up to $5,000 or 25% of total solar energy expenses (whichever is lower). It applies to those who lease or buy a system, and allows residents to roll the credit over to the next year if needed.

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North Carolina

In addition to the federal solar tax credit and net metering, North Carolina residents have these incentives:

• Duke Energy solar panel rebates: For North Carolina homeowners who install solar, Duke Energy offers a $0.60 per watt rebate for systems up to 10 kilowatts. This means that an average 6 kilowatt (kW) system could see a rebate of $3,600. They also offer rebates for nonresidential customers worth $0.50 per watt up to $50,000, and for nonprofit customers, $0.75 per watt up to $75,000. *Note: Duke Energy has given out all its rebates for the first half of 2021. Interested solar customers will be put on a waitlist.

• Revolving loan options: North Carolina passed legislation that allows for cities and counties to offer low-interest loans for solar panels and other energy upgrades. These loans must be 20 years or less, with interest rates capped at 8%.

• State property tax exemption: As in many other states, North Carolina homeowners will not have to pay additional property taxes related to the installation of their solar energy systems.

• Building permit rebates: Residents of Asheville, North Carolina, can receive a rebate on your building permit when installing solar on residential or commercial properties.

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Ohio

In addition to net metering and the federal solar tax credit, Ohio residents have these solar incentives:

• Solar Renewable Energy Certificates (SRECs): As part of Ohio’s commitment to producing 12.5% of its electricity from renewable resources by 2027, residents can sell their SERCs for cash. Residents receive one SERC per megawatt hour (MWh) of electricity produced. In 2016 these certificates sold for about $15.

• Energy Conservation for Ohioans (ECO-Link) Program: Eligible applicants will receive up to a 3% interest rate reduction on bank loans related to solar energy systems, for up to seven years.

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Oregon

In addition to net metering and the federal solar tax credit, Oregon residents have these solar incentives:

• Oregon’s solar electric incentive program: Customers of Portland General Electric (PGE) or Pacific Power offers consumers a rebate from $0.20 per W to $0.25 per W for those who own their solar energy systems. This could add up to $1,500 in savings on an average 6-kilowatt solar panel system.

• City rebates: The city of Ashland offers homeowners a cash rebate of $0.50 per W when they go solar. Eugene Water and Electric Board pays $0.40 per W to solar homeowners. And customers of Salem Electric can receive $600 for the first three kW installed and $300 for every additional kW.

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Pennsylvania

In addition to net metering and the federal solar tax credit, Pennsylvania residents have this solar incentive:

• Solar Renewable Energy Certificates (SRECs): Pennsylvania solar energy system owners can sell their SRECs back for cash. In 2019, these credits were valued at about $24.

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Rhode Island

In addition to net metering and the federal solar tax credit, Rhode Island residents have these solar incentives:

• This solar grant program: This pays solar homeowners $0.85 per watt through the installing company, capped at $7,000. For an average 5-kilowatt system on your roof, this translates to an instant $4,250 in cash.

• Residential Solar Energy Property Tax Exemption: This ensures Rhode Island residents won’t pay increased property taxes as a result of the value your new solar panels add to your home.

• Renewable Energy Products Sales and Use Tax Exemption: Rhode Island residents do not have to pay any sales tax on their solar energy systems.

• Renewable Energy Growth program: The Rhode Island Solar Marketplace helps homeowners find the best and lowest priced solar installers. Participating customers will receive 29.65 cents for each kilowatt-hour they sell to the grid for the first 15 years of their system.

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South Carolina

In addition to net metering and the federal solar tax credit, South Carolina residents have these solar incentives:

• Duke Energy Progress: Customers of Duke Energy Progress are eligible for a rebate of $1.00 per watt of solar power. For an average 6-kilowatt system, that could add up to $6,000.

• Santee Cooper: Santee Cooper customers may apply for a rebate of $1.30 per watt of solar energy, up to $5,200.

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Texas

Texas does not have a statewide solar tax credit or solar rebate program, or statewide net metering program, but many utilities and local governments offer incentives to go solar. In addition to the federal solar tax credit, Texas residents have these solar incentives:

• City-specific rebates: The cities of Austin and Sunset Valley offer rebates to homeowners.

• Utility-specific rebates: Several Texas utilities offer rebates for installing solar, including CPS Energy, Guadalupe Valley Electric Cooperative and Garland Power and Light.

• Renewable energy systems property tax exemption: Texas residents will not pay increased property taxes on their home when solar panels increase their home value..

• Utility credits: Texas is one of the few states on this list that does not have a statewide net metering policy. However, several individual utilities (including El Paso Electric, the City of Brenham, CPS Energy and Green Mountain Energy) will credit owners of solar energy systems for the electricity that their panels produce.

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Utah

In addition to net metering and the federal solar tax credit, Utah residents have these solar incentives:

• Renewable energy systems tax credit: Homeowners that install a solar energy system in Utah will receive a tax credit on their next year’s taxes up to 25% of total equipment and installation costs (capped at $1,600). This tax credit reduces in value by $400 each year and expires in 2022.

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Vermont

In addition to net metering and the federal solar tax credit, Vermont residents have these solar incentives:

• Renewable Energy Systems Sales Tax Exemption: Vermont residents do not have to pay any sales tax on the purchase of a solar energy system.

• Uniform Capacity Tax and Exemption for Solar: Residents do not have to pay increased property taxes related to the value added by their solar panels.

• Community shared solar in Vermont: Vermont’s community solar program allows Vermont residents to share in an off-site shared solar installation, earning credits that cover the cost of their utility bill.

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Virginia

In addition to net metering and the federal solar tax credit, Virginia residents have these solar incentives:

• Residential property tax exemption: Installing a solar energy system often increases the value of a home, and thus, property taxes. Depending on your locality, you may be able to take advantage of exemptions or partial exemptions on paying higher property taxes related to your solar system.

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Washington

In addition to net metering and the federal solar tax credit, Washington residents have this incentive:

• Solar easement laws: Solar easement laws make sure that nothing on a neighbor’s property will obstruct the sun from reaching your panels and that no homeowners’ association can stop you from installing solar panels on your residence.

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Wisconsin

In addition to net metering and the federal solar tax credit, Wisconsin residents have these incentives:

• Focus on Energy renewable rewards: This rebate program offers eligible participants a flat $500 toward the costs of permitting and connection of solar panels.

• The sales tax incentive: Wisconsin residents do not pay sales tax on your solar equipment.

• The property tax incentive: Wisconsin residents are exempt from paying property taxes on any additional value solar adds to your home.

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This article originally appeared on GOBankingRates.com: These 34 States Offer Incentives To Go Solar