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Solar incentives are disappearing. Get them before it’s too late!

Avatar for Ben Zientara
Published on 03/24/2016 in
Updated 08/30/2019

In the past decade or so, solar incentives have been a main cause of the exponential growth of the nation’s solar industry. With tax credits, rebates and performance payments, the country (and many states) have put into place common-sense subsidies to help this important technology mature and become a vital part of out nation’s energy supply mix.

And mature it has. In fact, the incentives have done such a good job of helping solar grow that they’re no longer needed. Solar power can compete financially with almost any other energy source. So the incentives are going away, which means if you’ve been thinking about solar for your home, now is the time. Connect with a solar expert near you today.

This is such an important issue that we’ve created a new infographic that will tell you all about the problem. Check it out below, or if you’d prefer to peruse paragraph after paragraph, scroll down to read more.

Like this infographic? Copy and paste the code below to embed it on your site!

Incentives are effective

Like we said above, incentives have helped solar grow—and prices for solar have come down so fast—that it’s almost hard to believe! Check out this graph from Greentech Media Research and SEIA:

That chart shows a 70% decrease in prices over a decade, and a 6,000% increase in installed solar. Incentives have played a big part in making solar not just affordable, but a great financial investment. In many states, going solar is a better investment than stocks, bonds, home ownership… almost any other kind of financial vehicle.

Solar incentives have done their job so well that they’re no longer needed. The tax credits, rebates, and performance payments of the past were great to spur growth and lower prices, but they’re going away. In fact, most have already gone away, which means taking advantage of those that remain is more important than ever. The huge declines in the costs to install solar are slowing, so incentives are your best bet to get the cheapest possible deal.

Solar Tax Credits

The most important thing to know about solar tax credits is the federal government’s Investment Tax Credit (ITC), which provides 30% of the cost to install solar panels back as an income tax credit. If you’re a working person with a home, this credit will save you thousands of dollars in taxes, making solar immediately less costly.

From there, state solar tax credits are a bit more difficult to find. 14 states have them available to homeowners. Four of those will expire by the end of 2017 (Iowa, Louisiana, New Mexico, and Oregon), and five others expired before 2016 began.

That leaves ten states with ongoing solar tax credits, and not even those are guaranteed to last forever. And that Federal ITC is going away after 2021, with decreases in percentage beginning in 2019. If you live in a state with a solar tax credit, take advantage of it now—get a quote for home solar.

Here’s a table with all of the current state solar tax credits:

RankNameTax CreditsGrade
1stLouisiana$2,000/kW, up to $10,000A
2ndOregon$2,100/kw up to $6,000A
3rdHawaii35% or $5,000A
4thNew York25% up to $5,000A
5thIowa18% of Costs, up to $5,000B
6thNew Mexico10% up to $9,000B
7thUtah25% up to $2,000B
8thIdaho$370/year for 4 yearsB
9thSouth Carolina25% up to $3,500 or 50% of taxpayer’s liabilityB
10thArizona25% capped at $1kC
11thMassachusetts15% up to $1,000C
12thMontanaMaximum Incentive: $500 per individual taxpayer; up to $1,000 per householdC
13thKentucky$3/W, $500 maxC
15thNebraska$0.0005/kWh for 10 yearsD

Solar Rebates

Rebates used to be a wildly popular way to take money off a solar installation. Because so many states set high goals for renewable energy, utility companies were willing to pay big money to help you go solar, just so they could claim your energy as coming from their service territory.

With solar rebates, you might get the money off immediately, shortly after installation, or as a payment over time. The good news is you don’t need any income to get rebates (unlike tax credits), so they can be a great way to save money if you’re a retired person who wants to install solar on your home.

In all, 24 states (plus the District of Columbia) have some kind of rebate program. But only 9 states meet our criteria for having “good” rebates. We grade the states on rebates—among 10 other factors—in our yearly State Solar Power Rankings Report.

Here’s a table with information on all available rebates:

StateGradeRebate Specifics
ConnecticutAUp to $9,400
OregonAUp to $9,500
MissouriBLocally available – $500/kW
MontanaB$2,000 per system, 2-kW minimum
New HampshireB$750/kW statewide,
plus $250/kW for NHEC customers
New YorkB$700-$1,400 per kW
PennsylvaniaB10% of costs
Washington DCB$250/kW
WisconsinB$600/kW, up to $2,400
ArizonaCVaries by utility
CaliforniaCVaries by utility
ColoradoCVaries by utility
MarylandC$1,000 for systems up to 20kW
MassachusettsCVaries by locale
NevadaC$147.50/kW up to 25kW
New JerseyCVaries, New Construction Only
South CarolinaC$1/watt, Duke Energy Progress only
UtahC$1,100/kW up to $4,400 – RMP only
FloridaDCity of Longwood: 10% of costs up to $500
NebraskaDLES only, $375-$475/kW
WashingtonD$300/kW Snohomish cty only

Performance Payments (SRECs)

Solar Renewable Energy Credits (SRECs) are a kind of performance payment for the energy your system generates. Performance payments are any per-kilowatt-hour (kWh) payment you earn for actually producing power. These differ from rebates and tax credits in that they are determined by how well your system actually performs.

SRECs are a kind of tradeable asset—think of them as “proof of generation.” Remember how we said utility companies offered rebates because they wanted to show that solar energy was being generated in their service area? An SREC market is another way of doing that. You earn one SREC every time your system generates a Megawatt-hour (MWh) of electricity, which you can then sell to the utility company for big dollars. Unless you live in Pennsylvania, where the SREC market crashed a few years back.

Actually, SREC market prices have gone way down all over the country. The exception is Washington D.C., which has a robust SREC market based on its high Renewable Portfolio Standard. In other states, including Delaware, New Jersey, Massachusetts, Maryland, and Ohio, SREC prices are way down from where they used to be.

To a certain extent, this is how it’s designed to work. States set high goals for solar adoption within their RPSes, and require utility companies to meet those goals or pay fines called “alternative compliance payments” (ACPs). The companies buy SRECs to contribute to the goals, and each SREC has the value of nearly the cost of the ACP for a MWh. But the ACPs go down as the goal gets nearer, so the SRECs are worth less. Again, though, the initial cost of solar has gone down, too, so the financial returns of solar are about equal, even without the great SREC market.

Incentives work, and the world keeps spinning.

All is not lost. Solar is cheaper than ever because incentives have done what they were designed to do. But some are still hanging on, making solar even cheaper than it would otherwise be.

That’s why now is the best time to go solar. Take advantage of the lowest prices in history and big incentives that will save you thousands over the next few years. Solar is a long term investment, and as sure as the world keeps turning, the sun will shine on your panels every day and keep making that sweet, clean electricity that earns you money back on your utility bill—and sometimes a little extra, with an SREC or a tax credit to boot.

Make sure to connect with one of our nationwide solar experts today. You’ll be glad you got into solar before all these great incentives disappear.

Last modified: August 30, 2019

One thought on “Solar incentives are disappearing. Get them before it’s too late!

  1. Avatar for Anonymous Anonymous says:

    I have a home in Vermont, but am a canadian

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