Solar incentives

Ahh, solar incentives. They’re wonderful! They’re critical to consider when determining how much solar will cost you today and how it might 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. As you speak to local solar companies and members of the community who have already made the move to solar, you are sure to hear about the incentives offered in your area. These programs and offers can provide significant financial benefits. Be sure to complete your due diligence and speak to as many solar companies as possible to ensure you get all the information and opportunities to save money as you work to save the planet.

Other information could be found by reaching out to your municipal offices to inquire about solar companies working in the area or any that have developed programs specifically for your community to offer discounts and educational opportunities or simply provide informative meetings or lectures for community members. And of course, you can always turn to the internet to join local discussion groups or find resources shared among the larger community of the World Wide Web.

Let’s dig in and learn more about how you and the planet can win big by going solar.

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If you have recently begun to explore the option of going solar at your home or business, the technology, concepts, and terms can all be a bit intimidating. But we hope that after you explore the information provided by Solar United Neighbors, you feel a little more comfortable and excited about the possibilities offered by solar power and the solar companies collaborating to create the future of affordable and environmentally conscious power.

The critical information that we know you will immediately appreciate is that Solar United Neighbors is not affiliated with any brands or solar companies. Instead, we are here to help work as a bridge to connect consumers with all that is part of the solar energy industry. We can help you compare and contrast the various features and products offered by solar companies in your area, provide basic information and background to help you feel more educated and prepared to make decisions about solar companies, solar power options, and the choice you will make in the next few days or weeks that will impact your property for decades to come and many future generations.

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.

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. 

  • 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.


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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


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