Government Solar Incentives

What federal, state, and local government solar incentives exist for you take advantage of?

As the positive impact of solar power has really begun to be realized, many programs, rebates, and tax credits were created to incentivize the investment in solar. This clean, reliable, and renewable energy takes pressure off of the grid as a whole, and protects the environment. Not to mention it saves the homeowner tons of money and raises the value of their house. Sunternal will assist in making sure you take advantage of every program and rebate available to you. See what incentives may exist in your area and see if you qualify.

Federal Incentives

The current Federal Solar incentive or ITC (Investment tax credit) in 2020 is a 26% discount on the cost of a solar energy system that you then deduct from your federal taxes. For example, if you install a $10,000 solar system, you would save $2,600 on the bill and deduct that from your taxes the next period. This is available for all 50 states and territories. The average savings for customers using just the Federal tax credit incentive is around $9000. Recently, congress has extended the ITC from a step-down program to a flat 26% discount for the next 2 years. Read more about the Solar Investment Tax Credit here.

State and Local Incentives

State incentives are separate from the federal tax credit, but will stack on top of it. But this is where things get more complicated - as each state has different programs and requirements. Local rebates and additional benefits may exist in your specific area as well, adding up to very solid savings for investing in solar once you take everything into account.

California

• Local Rebates: Many local rebates are available in California, depending on where you live. These rebates can give you a one-time cash back opportunity or pay you for every watt of installed capacity on your solar panels. Make sure to check in with your local county or city to see what is available to you.

• PACE Solar Financing: A California Solar Tax Credit. The Property Assessed Clean Energy (PACE) program allows you to finance your solar system and pay it back through your property taxes. There are also county-based variations on this program that may be known under different names.

• Net metering: California offers Net Metering (NEM 2.0), allowing you to receive credits for excess power generated that you can use later. This is a statewide incentive.

• DAC-SASH: The Disadvantaged Communities - Single-family Solar Homes (DAC-SASH) program allocates solar rebates for customers of Pacific Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE) if your income level qualifies.

New Mexico

• New Mexico state solar tax credit: A very impressive state solar incentive; the New Mexico state solar tax credit will credit you 10% or up to $6000 on the installation of a new solar system. This stacks with the federal ITC, which adds up to immense savings.

• Sustainable building tax credit: New Mexico state government could pay you up to $6.50 per square foot for having a sustainable home. For example, the average square foot of a home in New Mexico is 1,982 sqft. Multiply that by x $6.50 and you get $12,883! Once your house is certified, you can get credited thousands of dollars by the New Mexico government on your taxes!

• Net metering: New Mexico also offers net metering, with some of the best policies in the nation.

• Property tax exemption: Going solar raises the value of your home. But the extra value that comes from from having solar power on your home will be exempt from your taxes, meaning you get even more ROI by going solar. So you get the benefit of a lower utility bill and higher property value, without the drawback of a higher property taxes.

• El Paso electric renewable energy certificate purchase program: If your utility provider is El Paso Electric Company, they could pay you up to $0.02 for every kilowatt-hour (kWh) of electricity you produce if you participate in the program.

Texas

• Texas local solar rebates: Texas does not have a statewide solar rebate program, however there are may local rebates you can take advantage of depending on where you live - like Austin, where you can get a solar rebate of $2,500 plus $0.097 for every kilowatt-hour (kWh) of solar you can produce. If you are a customer of CPS Energy, you can receive up to $1.20 per kWh you can produce. There are other rebates you can take advantage of as well, depending on where you live and what your utility provider is, such as ones offered by gvec, GP&L, and the City of Sunset Valley.

• Property tax exemption: Texas has a solar property tax exemption that excludes the added value your home gains from having solar panels on your property tax bill. So you get the benefit of a lower utility bill and higher property value, without the drawback of a higher property taxes.

• Net Metering: While Texas does not offer an official statewide net metering policy, many utility companies offer their own version of net metering - meaning you will get credited for excess power you produce, and use up those credits when you aren’t producing more power than you are consuming. CPS Energy, the City of Brenham, Green Mountain Energy, and El Paso electric all offer some form of net metering.

• Solar Rights law: While not actually an incentive, the Solar Rights law dictates that an HOA (Homeowners Association) cannot prevent you from installing solar on your property.

Virginia

• Property tax exemption: Just like Texas and New Mexico, Virginia has a solar equipment property tax exemption, which means the extra value that comes from from having solar power on your home will be exempt from your taxes, so you get even more ROI by going solar. You will get the benefit of a lower utility bill and higher property value, without the drawback of a higher property taxes.

• Net Metering: Utility companies like Dominion Energy offer Net metering, which means you will get credited for excess power you produce - and then use up those credits when you aren’t producing more power than you are consuming (like at night).

Kentucky

• Net Metering: Kentucky utility companies offer Net Metering, which means you will get credited for excess power you produce - and then use up those credits when you aren’t producing more power than you are consuming (like at night).

• Kentucky Solar Tax credit: You can get up to $500 to go Solar in Kentucky. The tax credit adds up from a $3 per watt from the capacity of your system, but caps out at $500.

Mexico

• Net Metering: The Company CFE and some other offer Net metering, meaning you get credited for excess power you produce - and then use up those credits when you aren’t producing more power than you are consuming (like at night).

• Financing for solar projects: Financing for Small Scale Solar Projects (FIDE) provides financing and offers other programs for residential solar projects.

• Eco-technologies credit: If you qualify, you could have an additional credit for having a home that produces energy from a renewable source, through INFONAVIT.

Live somewhere else? Or maybe you want to find out more?

Don’t worry, the Database of State Incentives for Renewables & Efficiency (DSIRE) was created as a hub of information for people trying to invest in renewable energy. Check out their website for more solar incentives by state not mentioned above.