So you want to go solar, but the high upfront cost might be clouding your solar dreams…
You’re not alone in feeling this way.
So many solar enthusiasts think that they can’t afford to go solar based on inaccurate quoting systems and outdated ideas about solar financing.
The truth is that solar is more affordable now than ever before, partly because of the sheer number of solar incentives available to you.
Not only can solar incentives cut your cost of going solar by thousands—but they also speed up your return on investment by leaps and bounds by earning you more money for your energy.
And understanding precisely what solar incentives are and how they work is even easier than you’d think with our ultimate beginner’s guide to money-saving solar incentives.
Read on for the inside scoop on the three best solar incentives available right now, plus a few others you should have on your radar, and how to quickly find out which solar incentives apply to you.
What Are Solar Incentives?
Solar incentives are ways to support and reward your switch to solar.
These can come from the federal government, your state, city, utility company, or any other organization that supports solar.
Solar incentives make solar more affordable for everyone and significantly speed up your solar system’s return on investment (ROI).
How Do Solar Incentives Work?
Since solar incentives come in many different forms, they’re applied in different ways.
For example, the federal solar tax credit and state solar tax credits are deducted directly from your federal or state taxes.
Other incentives, like credits with your utility company or solar renewable energy certificates (SRECs), can be cashed in later to pay your power bill or as additional income.
But it’s important to note that all incentives go to the system owner, so you’ll need to purchase your system either with cash or a solar loan for these incentives to apply to you.
The 3 Best Money-Saving Solar Incentives
Wondering which solar incentives can save you the most money? Let’s get right into the details of the top 3 solar incentives out there right now:
1. The Investment Tax Credit (ITC)
The investment tax credit (ITC) is at the top of the list, also known as the federal solar tax credit.
This solar incentive is available to all Americans. Currently, it lets you deduct 26% of the cost of your installation from your federal taxes—that translates to thousands of dollars off your cost of going solar!
Take advantage of the ITC while you can, as it’s likely to dwindle or disappear completely in the coming years…
2. State-Specific Incentives
Many states offer special incentives to encourage their residents to switch to renewable energy.
Depending on where you live, you may be eligible for state solar tax credits that are deducted from your state taxes, similarly to the ITC.
Other examples of state solar incentives include sales tax exemptions on your solar purchase and protections from higher property taxes due to the added value of your system.
Some states even offer unique benefits, like the SolarSense lottery-based rebate in Minnesota that can cover as much as 60% of the cost of your system or Ohio’s ECO-Link Program that can reduce your interest rate by up to 3% for as long as 7 years.
Needless to say, it’s worth looking into what specific solar incentives your state offers if you’re looking to save big on your new system.
3. Net Metering
Net Metering, or net energy metering (NEM), allows you to earn credits with your utility company for the excess energy you send off to the grid.
If you live in a state that mandates Net Metering, your utility company will install a Net Meter on your home once you’ve been granted permission to operate (PTO).
Here’s how Net Metering saves you money:
Net metering is an electric billing tool that uses the electric grid to store excess energy produced by your solar panel system. Under net metering, the energy your solar panels produce and you don’t use is credited back to you. Your smart electric meter will track your give-and-take relationship with the grid; then, you’ll be rewarded with credits on your utility bill when you “net” more power than you need.
You can cash in on these later when you pull power from the grid or to offset times when your panels aren’t producing enough—this helps to “smooth” your seasonal solar costs.
Many states offer Net Metering, but some choose to compensate their solar residents in other ways, such as via value-of-solar rates or performance-based incentives (PBIs).
What Other Incentives Exist for Going Solar?
In addition to the ITC, state-specific incentives, and Net Metering, there are other incentives out there to support your switch to solar. These are often time-limited and location-based, so they may not be available to you.
Let’s sum up a few other solar incentives that should be on your radar:
- Cash rebates: limited-time offers from your state, city, utility company, or other organization that supports solar that can reduce your costs by up to 10-20%
- Solar renewable energy certificates (SRECs): certificates offered by states looking to produce a higher percentage of solar power—these can be sold to your utility company for hundreds or even thousands of additional income
- Performance-based incentives (PBIs): credits for the actual energy your panels produce, usually by $/kWh over a period of time
How Can I Find Solar Incentives Available to Me?
Finding out which solar incentives apply to you is easier than ever, thanks to an abundance of resources available on the internet.
The Database of State Incentives for Renewables & Efficiency (DSIRE) is a great place to start. DSIRE is dedicated to providing the most up-to-date information on solar incentives and policy. Simply click on your state or enter your zip code and select solar programs to start exploring information for your area.
But, if you’d rather hear exactly what incentives apply to you in plain English, it’s best to reach out to a solar installation company in your area.
Our experts at Kuubix Energy are happy to help you explore your options, educate you on important incentives, and create a custom system that fits your needs and budget.
Summing Up Solar Incentives
Thanks to solar incentives, making the switch to solar may be more affordable than you think.
Solar incentives can help you purchase your system for less and pay it off even quicker.
Plus, depending on where you live, you can even get paid for your extra energy either in the form of credits with your utility company or other incentives that can boost your income.
Finding out which solar incentives are available to you is easy when you reach out to the right solar installer. Let’s sum up how solar incentives can save you money:
- Solar incentives are different ways to support and reward your switch to solar, like tax deductions or creditswith your utility company
- The investment tax credit (ITC) is available to all Americans and lets you deduct 26% of the cost of your system from your federal taxes
- Some state-specific incentives include state solar tax credits, sales or property tax exemptions, and other unique benefits
- Net Metering earns you credits with your utility company for any excess energy you send to the grid
- Other incentives for solar include cash rebates, SRECs, and PBIs, but these are often time-limited and specific to certain areas
- Reach out to a solar installer to find what solar incentives are available to you