Solar Incentives Make Going Solar More Affordable Than Ever

Solar Incentives Overview

Solar incentives differ from area to area. Depending on their availability, they can make going solar more affordable and save you money!

A solar incentive is a government program that pays you money to switch to solar. There are many different types of solar incentives. They range from one-time tax credits or cash payments to continued payments over the life of your system. This article will cover the main types of solar incentives.

solar incentives

Federal investment tax credit

One of the most important solar incentives available in the U.S. is the solar Investment Tax Credit (ITC). The ITC is a federal program that offers tax credits to home and business owners who invest in solar projects for their properties. It was enacted in 2006 and will expire at the beginning of 2024. For 2022, 26% of the total purchase price of your solar system can be deducted from your income taxes owed to the federal government the following fiscal year. In 2023, the ITC is set to reduce to 22% and will expire in 2024.

State-specific policies

Besides the ITC, many states have their own solar incentive programs. States such as California, New York, Massachusetts, New Jersey, and Maryland have some of the best incentives in the nation, but incentives to go solar can be found anywhere. Common programs include:

  • Property tax exemptions for the value of your solar system
  • Sales tax exemption on the purchase of a solar system
  • Low-interest loans
  • Cash rebates to offset project costs
  • Low-income incentives

These are just a few examples of solar incentives that can greatly reduce the cost of going solar. There are many different types of solar incentives, and not all of them will be available in every area. DSIRE manages a comprehensive database on the specific incentives available in each state. It is important to research your state’s policies to maximize your savings and is happy to help! Reach out to us!

Performance-based incentives

An important category of solar incentives offered by many states and utility companies is performance-based incentives (PBIs). These programs reward home and business owners for the energy produced by their solar energy system. There are two main categories of PBIs.


In many states, utility companies are required to produce a certain percentage of their electricity from renewable sources like solar. To meet their clean energy requirements, many companies will purchase the energy produced by home solar systems to count it towards their quota.

SRECs are the mechanism through which ownership of the energy is transferred. One certificate is issued to a home or business owner for every 1,000 kilowatt-hours of energy produced by their system. Each SREC can typically be sold for hundreds of dollars!

Net metering

In many states, your utility company can install a two-way meter on your property and connect your solar system to the grid. The meter can measure both the electricity used by your property and the excess electricity produced by your solar system that is fed into the grid.

Throughout the day, the energy produced by your solar system will exceed the energy needs of your house. To minimize waste, the energy produced by your system can be sent into the grid for others to use. To compensate owners for their energy, they receive credit for their energy bill.

The bottom line

A variety of solar incentive programs can make going solar extremely affordable. In some cases, your solar system can continue to make you money over the course of its operation. Navigating all of these policies can be a daunting task, but our team can help you take advantage of the solar incentives in your area.