Solar incentives New

Ahh, solar incentives. They’re wonderful! And they’re critical to consider when determining how much solar will cost you. You may be eligible for national incentives, as well as state, local, and utility-specific incentives depending on where you live. 

Let’s dig in.

Homeowner with her solar panels
Download the Rural Business Guide now

All fields required. By submitting this form, you agree Solar United Neighbors may contact you by email.

It can be a bit overwhelming when you first begin to explore the options and systems available for solar power at your home or business. At Solar United Neighborhood, we would like to welcome you to this community of environmentally minded neighbors. Our staff has compiled a great deal of information that can help you as you learn about solar power, selecting a solar company, and how to evaluate what various solar companies have to offer, their similarities and differences, and what might be the signs of your ideal solar installation company.

In addition to learning all the science and technology that makes solar energy a great option for you and the planet, our staff wants to help you understand all the financial incentives offered to make this transition as stress-free and beneficial as possible. Even if you have not yet reached out to a single solar company for a price quote or technical information, please take a look at the great information below to understand how affordable it can be for you to go solar.

Discovering New Solar Incentives

Incentives are critical to consider when determining how much solar will cost you today and how it might also help you with future expenses and taxes. You may be eligible for national incentives, as well as state, local, and utility-specific incentives, depending on where you live. In many areas, when you reach out to various solar companies in the area, they will include information about the many incentives that will apply in your area. So be sure to contact more than one solar company to ensure you hear about all the various local perks you can take advantage of when preparing to go solar.

It can also be helpful to reach out to your current electricity provider to learn about incentives or solar companies they work with or have previously worked with. Many power companies offer extensive resources for customers researching and considering a solar power solution and searching for a solar company. In some communities, you will also find that the power company is eager to buy any excess power your solar equipment is generating. So be sure to explore all those options and the added income your solar panels could generate in the future.

Nationally available incentives

Federal solar investment tax credit (ITC)

Homeowners and business owners who go solar can make use of the Investment Tax Credit (ITC) offered by the federal government. The tax credit is a percentage of your system cost—and there’s no cap on the amount.

The ITC is a one-time, non-refundable credit that you receive when you file your taxes for the year you had your solar array installed. You can roll over the tax credit to subsequent years if you’re unable to use all of the credit in the first year. However, you can roll over the tax credit to subsequent years if you’re unable to use all of the credit in the first year.

With the passing of the Inflation Reduction Act of 2022, the tax credit is:

  • 30% of system cost for systems placed in service between 2022 and 2032
  • 26% of system cost in 2033
  • 22% of system cost in 2034

Other resources: Residential Clean Energy Credit (IRS), Form 5695 instructions (IRS), Dept. of Energy Guide

How do I get the tax credit?
In most cases, your solar installer will give you a receipt for the total cost of your system after it’s installed. You can then give this receipt to your accountant and receive a tax credit off the total cost of your system.If you can’t realize the full value of your credit in the first year, you may be able to roll it forward to reduce your tax burden in subsequent years.

Eligibility for the tax credit happens after a system has been “placed in service,” as stated in the tax code. What that means is a gray area. According to the Solar Energy Industries Association (SEIA) a conservative interpretation would be when your system is ready to be connected to the grid. This is confirmed in the IRS FAQ. (NOTE: The SEIA page is from 2019 so the tax credit percentages shown there may be out of date.)

To be sure, we recommend that you consult with a tax expert or accountant. We’re not tax experts at Solar United Neighbors, so we can’t offer tax advice.

Can I include roof improvement or replacement costs in the credit?
No, not in most circumstances, according to an FAQ on the IRS website. It says, “In general, traditional roofing materials and structural components do not qualify for the credit.”Solar shingles or tiles may qualify, though. We recommend reading carefully through the IRS FAQ and through the applicable tax form (IRS Form 5695) for more information.

What about battery storage?
The ITC does apply to battery storage! Huzzah! The credit is available for battery storage at the rates listed above whether you pair it with solar or you just install a battery by itself (starting in 2023).

USDA Rural Energy for America Program (REAP)

Are you a farmer or a rural small business owner? If so, you may be eligible for a grant or loan for your solar array from the U.S. Department of Agriculture. This is a great way to add to the value of your business or farm and demonstrate your commitment to protecting the planet as a leader in your community who is going green with solar power.

  • The USDA Rural Energy for America Program (REAP) provides competitive grant funding and guaranteed loan financing to agricultural producers and rural small businesses for renewable energy systems and energy efficiency improvements.
  • Agricultural producers with at least 50 percent of gross income coming from on-site agricultural operations are eligible to apply for competitive grant funding and guaranteed loan financing through REAP. Small businesses in eligible rural areas also can apply.
  • Competitive grants are available for up to 50 percent of total eligible project costs. Loan guarantees are available for up to 75 percent of total eligible project costs. Combined grant funding and loan guarantees are available for up to 75 percent of total eligible project costs.

Learn more about going solar as an agricultural producer and how we can help.


Make a tax-deductible donation today to Solar United Neighbors to help more people go solar, join together, and fight for their energy rights.

State-specific incentives

Solar renewable energy credits (SRECs)

SRECs can be one of the most confusing parts of going solar. But depending on where you live, they could be worth a significant amount of money over the life of your system. So, it’s important to understand them. Let’s break it down.

When you generate solar electricity from your system, you also generate an associated “green value” for that electricity. This is called a Solar Renewable Energy Credit, or SREC (pronounced ess-rec). 

Every time your system produces 1,000 kWh (1 MWh) of electricity, you earn one SREC. In some states, these credits have a monetary value that the system owner can capture. 

The value of SRECs varies over time depending on supply and demand and the state’s rules governing this incentive.

Learn more about SRECs.

Other state, local, and utility-specific incentives

Some states and local governments offer incentives to residents who install solar. 

These incentives can come in the form of:

  • Grants
  • Rebates
  • Waived permitting fees
  • Tax credits
  • Additional assistance for low-income homeowners

Check out our state-specific info on these types of incentives.

Search this database of state incentives for renewables and efficiency. It’s the most complete resource on solar incentives in the country. You can search incentives by state.

Ready to go solar? ☀️

Solar United Neighbors hosts solar co-ops all over the country. These solar learning and buying groups can help you understand solar energy and get a discounted group rate on your installation.

See if there’s one in your area!

Learn more

We’ve compiled additional information about solar incentives in some states. Are you looking for information that isn’t covered here? Contact us.

  • Arizona

  • Colorado
  • D.C.
  • Florida
  • Indiana
  • Maryland
  • Minnesota
  • New Jersey
    New Jersey
  • Ohio
  • Pennsylvania
  • Texas
  • Virginia
  • West Virginia
    West Virginia


Help Support Our Work

Did you find this information helpful? Please make a tax-deductible donation to support our solar education work. At Solar United Neighbors, we do not represent a solar company or group of solar companies. Our purpose is to be an unbiased resource for consumers and business owners interested in going solar and getting the most for their investment. While we do not recommend a specific solar company to install your system, we are happy to work with you as a consultant to determine what will work best for your needs and budget.