Solar Incentives - Solar Econo

Federal Income Tax Credit for Solar

A tax credit is a reduction in the amount of tax you otherwise would pay to the government. It is dollar-for-dollar—if you have $500 in tax credit, you will pay $500 less tax.

The Federal Government’s offer to those who wish to convert to solar energy, the Federal Income Tax Credit works the same way. You are eligible for this incentive if:

You are a lawful resident of the United States.
You are a registered taxpayer.
You are a homeowner.
You install a new solar system—either on cash or loan.

The tax credit covers the cost of your system hardware—photovoltaic cells, batteries, inverters, power optimizers, wires, etc.—as well as the installation cost.

It was set to be expired in 2015, but the government chose to extend it till 2022, with variations. If you have ever considered going solar, 2020 is the best year. Why? Because if you install a solar power system before December 31, 2020, you are eligible for a 26% tax credit. Keep in mind that this was 30% last year, and it’ll be 22% next year. It’ll gradually come down to 10% in 2022, but after that, there will be no more incentives for residential units! So why wait? Here, your upfront cost diminishes even more, given that 26% of that is returned to you in the form of a tax credit. Click here for a detailed guide to the Federal Solar Tax Credit for Photovoltaics, provided by the Office of Energy Efficiency and Renewable Energy.

1. California

California is a Golden State. While this nickname truly captures the background of California’s early development, we do not refer to the ‘traditional gold’ when we say it is a Golden State. What then do we mean? Solar power in California. It is one of the sunniest states in the United States. It receives 71% sunshine every day for more than 260 days, making it ideal for solar power consumption.

In 2019, California was declared the No. 1 solar state in the country. It has over 28,400 megawatts of solar power installed, facilitating 7,915,033 homes, and accounting for 22.19% of the state electricity. These numbers, although impressive, must not make Californians complacent. For, Renewable Portfolio Standard (RPS) in California requires that 60% of our energy needs come from renewable sources by 2030 and 100% by 2045. This is an ambitious target, but given the stimulus programs offered by the state government, California may well achieve the target earlier than expected. Following is an outline of the incentives currently in place around the state

a. Federal Income Tax Credit

Currently, this Tax Credit (Hyperlink the main page of Federal Income Tax Credit) stands at 26% of the total cost of the system. That is, if your solar power system is worth $10,000, you will be given $2,600 back in the form of a tax break. This incentive, however, has an expiry date. In 2021, you would be able to claim only 22% of the cost of the system. Similarly, 10% in 2022, and 0% (for residential installations) in 2023. Now is the best time to turn your rooftop into your own little powerhouse and earn 26% of your cost back.

b. Net Metering Policy

Net metering is a regulatory policy in place in many states, including California. Through this billing arrangement, a two-way meter keeps track of your consumption as well as your system’s generation. When someone has installed a solar panel system, you produce electricity from the system, it goes to the grid. Your utility gives you 1kWh power for 1kWh your system produce. But what if your system generates excess power? Fret not! California’s Net Metering Policy, known as NEM 2.0, enables you to receive bill credits for the excess electricity your solar panels generate. The system, however, should have a generation capacity lower than 1,000 kilowatts (1 MW).

c. Local Incentives

Californians have access to local rebate programs in many areas of the state. You can earn back anywhere from $500 total to $0.95 per watt of installed capacity. We list down three such programs here.

If you’re installing a solar system on your home in Rancho Mirage, the Rancho Mirage Energy Authority will provide a rebate of $500 to cover the cost of your permit fee. This rebate can be claimed after your utility company has granted permission to operate (PTO).
Another great program in California is the Property Assessed Clean Energy (PACE). Known as the Home Energy Renovation Opportunity (HERO) Financing Program, it is being offered in many cities and counties. PACE financing lets homeowners finance their solar system installation and pay it back through their property taxes.
Similarly, some utilities in California do offer additional solar incentives. For example, the Sacramento Municipal Utility District offers its customers a $300 rebate when they install solar panels on their roofs.

Other than these programs, there are also many county-specific versions of this program, such as Sonoma County’s Energy Independence Program. Fill in this form (hyperlink: Form), and one of our consultants will apprise you in detail about the incentives you may be eligible for.

d. Property Tax Exemption

A solar panel system adds value to the home. A typical 5kW solar panel system can add about $20,000 to your home’s resale value. But does the property tax applies to this increased value of your home? Thankfully, not in California. Under the Property Tax Exclusion for Solar Energy Systems, 100% of the assessed value of the solar system is exempt from your property taxes.

2. Nevada

Nevadans are lucky in the sense that they have access to the sun round the year! Okay, not round-the-year, but Nevada is one of the sunniest states, making your climate ideal for exploiting the sun’s rays as much as you can do. For instance, Las Vegas receives 294 days of sunshine a year, and Reno 252 days. This is an impressive amount of sunlight in a year. To put it in perspective, our national average is 205 days.

Nevada stands 6^th in the 2020 National Solar Ranking, according to the Solar Energy Industries Association. It has over 3,600 megawatts of solar power installed, facilitating around 652,128 homes. Solar power in the state accounts for 15% of the overall state’s electricity. Nevada’s Renewable Portfolio Standard requires 22% of the state’s energy must come from renewable resources. By 2030, it should be 50%. It is achievable given the strong incentives offered by the state government and utility companies. Following is an outline of the incentives that are currently available around the state.

a. Federal Income Tax Credit

b. Net Metering in Nevada

Net metering in Nevada allows you to take control of your power usage! Through this arrangement, consumers give back the excess power their solar system generates to the utility providers. The state government had quashed this policy in 2015, which significantly hurt solar development in Nevada. But thankfully, this policy was resurrected in 2017. Now residential solar power systems that generate up to 1MW are eligible for net metering unless those systems produce more than 150% of their peak demand. To be more specific, the rules also depend on your utility providers. For instance, NV Energy customers will get credits worth 95% of the retail rate of electricity for the surplus power their systems generate. Similarly, if you live in Valley Electric Association’s service territory, you’ll get credit for your solar electricity at the same rate you would pay the utility. That means, if your system matches your demands, your electricity is free for the whole year.

c. Other Incentives

Other than the net metering, the state government has offered other incentives to the Nevadans who want to go solar. The Renewable Energy Portfolio Standard requires that Nevada’s 25% of energy needs should come from renewable sources, 6% of them from solar energy. To reward the households for turning to solar power, NV Energy offers the Renewable Generations, or Solar Generations, rebate program. Those home solar systems in Nevada that generate up to 25 kW of electricity can earn $0.20/watt back on their system. Here, another opportunity to save more on the upfront cost!

3. Arizona

Arizona is the sunniest state in the United States. It receives 85% sunshine every day and has 287 sunny days throughout the year. It stands 5^th in the 2020 National Solar Ranking, according to the Solar Energy Industries Association. Currently, Arizona has over 4750 megawatts of solar power installed, powering around 768,164 homes.

It is the sunniest state, having an ideal climate for solar energy. But its potential is not fully exploited. At present, solar power in Arizona accounts for 7.56% of the state electricity. But Arizona’s Renewable Energy Standard (RES) requires that 15% of the state’s electricity should come from renewable energy resources, solar energy being the most inexpensive and user-friendly of all. To help the residents go solar, the state has offered them different solar stimulus programs. Following is an outline of the incentives currently in place around the state.

a. Federal Income Tax Credit

b. Arizona State Tax Credit

Other than the Federal Income Tax Credit, Arizonans are also eligible for another tax credit known as the Residential Solar and Wind Energy Systems Tax Credit. Through this, you can avail 25% of the total cost of your system, or $1,000, depending on whichever is less. That is, you can obtain a maximum reimbursement of $1,000 with this incentive.

It is to be noted that this tax credit does not just cover the panels only but many types of equipment associated with a solar panel system. As the Arizona Form 310 reads, this tax break can be availed on “Solar photovoltaic systems – collectors, batteries, inverters, solar system related wiring, and including solar photovoltaic systems for recreational vehicles used as a residence. End-use appliances (even if they are 12 VDC) are excluded unless they are manufactured specifically for photovoltaic systems applications.”

You can also carry it over to the next year—for up to five consecutive years.

c. Sales Tax Exemption

If you are installing a solar system in Arizona, you are exempted from paying any sales tax on the purchase of equipment. The Solar and Wind Equipment Sales Tax Exemption is another incentive that can result in more savings, given that you won’t have to pay 5.6% state sales tax.

d. Property Tax Exemption

Did you know that installing a solar system on your rooftop increases the value of your home (Hyperlink: Increased Home Value)? Yes, it does— and by 3-4%. But that added value is exempted from property tax in Arizona thanks to the Energy Equipment Property Tax Exemption. It is great as after installing the system, you start saving from day one. Your home’s resale value increases which incurs property tax, but you are 100% exempted from paying any additional property tax on solar panels in Arizona.

4. New Mexico

According to the Solar Energy Industries Association, Rhode Island stands at the 18^th spot in the 2020 National Solar Ranking. At present, there is a total of 1070 megawatts of solar power installed in the state, powering around 259,098 homes. This means that almost 5% of the State’s entire electricity comes from solar energy. Given that the Land of Enchantment receives 75% of sunshine every day, on more than 270 days, it has an ideal climate for solar energy. Why not exploit it when it is free and brings us savings?

The New Mexico state government is making efforts to diversify its energy mix. For the same reason, it has offered some vigorous incentives programs to encourage more residents to go solar. Below is an outline of the incentives currently in place around the state.

a. Federal Income Tax Credit

b. New Mexico Solar Tax Credit

2020 brought great news for homeowners in New Mexico because Governor Michelle Lujan Grisham revived one of the great solar incentives that the State of New Mexico offered until 2016, the year it expired. This tax credit allows homeowners to earn 10% of their solar system’s cost back in the form of a tax credit. The maximum you could claim is $6000. But you needn’t worry as you can carry it over to the next year. For instance, if you have to pay the State $2000 in taxes but you also have a credit of $3000, this extra $1000 can be carried over to the next year.

This tax credit is other than the Federal Income Tax Credit. You can avail of both at the same. However, it is on the retail cost of the system and not after availing any incentives. Suppose your solar panel system costs $20,000. After ITC, which is 26% (for 2020), your cost becomes $14,800, an incentive of $5,200. Now, apply 10% of the New Mexico Tax Credit, and you save a further $2,000. Your cost becomes $12,800. Quite a great deal. Nay?

c. Net Metering

Net metering (Hyperlink: Net Metering) allows you to sell the excess power your system generates to your utility company. Some states have shelved this policy but not New Mexico. With one of the best net metering policies countrywide, New Mexico gives you the freedom to generate as much power as your system can. If it is more than what you use and your batteries can store, sell it to your utility. To do so, a meter will be installed at your residence, which will move forward when you draw electricity from the grid. It will run backward when you give the grid your excess power. At the end of the month, if your solar PV system generated more than you used, you will be given energy credits for every bit of that.

d. Property Tax Exemption

Did you know that installing a solar system on your rooftop increases the value of your home (Hyperlink: Increased Home Value)? Yes, it does— and by 3-4%. But that added value is exempted from property tax in New Mexico. It is great as after installing the system, you start saving from day one. Your home’s resale value increases which incurs a property tax, but you are 100% exempted from paying any additional property tax on solar panels in New Mexico. Thanks, New Mexico!

5. Texas

Texas has one of the highest potentials for solar energy in the country. Its climate and the state’s policies make it ideal for going solar. It stands at number 4 in the 2020 National Solar Ranking, according to the Solar Energy Industries Association. Currently, 5,570 megawatts of solar power is installed in the state, powering around 642,000 homes. This means that 1.35% of the state’s energy needs are met by solar energy.

To diversify its energy mix, Texas has set a Renewable Portfolio Standard of 10,000 MW of renewable energy by 2025. In a bid to encourage its residents to go solar, the Lone Star State has offered some stimulus programs. The following is a brief breakdown of the incentives currently in place around the state.

a. Federal Income Tax Credit

b. Net Metering

Unlike some states, Texas doesn’t have a state-wide net metering policy (Hyperlink: Net Metering). Should it be a problem? Not really. Some utilities have managed to secure this policy for their consumers. For example, El Paso Electric, the City of Brenham, CPS Energy, and Green Mountain Energy provide solar buyback programs. It means that if your system is generating more power than you need, these utilities will buy that excess power and give you cash or energy credits that you can use in later months.

c. Property Tax Exemption

A solar panel system adds value to the home. A typical 5kW solar panel system can add about $20,000 to your home’s resale value. But does the property tax applies to this increased value of your home? Thankfully, not in Texas. Lawmakers have made sure that in Texas your home’s increased value is 100% exempted from your property taxes.

d. Texas Solar Rebates Programs

Like Net Metering in Texas, rebates programs are not state-wide. How much you can get, and if you can, depends on where you live. If you’re a CPS Energy customer, you can receive up to $1.20/W of solar panels that you install on your roof. But as more panels are installed across the state, the value of this rebate decreases. There is more for residents of Austin as well! They can now get a rebate of $2,500 from Austin Energy.

If you want to know more details and if you qualify for these rebates, fill in this form (hyperlink form), and one of our energy advisors will apprise you more.

6. Colorado

Colorado stands at the 12^th spot in the 2020 National Solar Ranking, according to the Solar Energy Industries Association. Currently, 1,515 megawatts of solar power is installed in the state, electrifying around 299,000 homes. This means that 3.71% of the state’s energy needs are met by solar. But it has tremendous potential for solar energy given its climate and the number of sunny days. On average, the Centennial State has around 260 sunny days, including partly sunny days. To put it into perspective, our national average is 205 days.

The state government is taking commendable steps to diversify its energy mix. In order to encourage its residents to go solar, the government has offered some stimulus programs. Below is a breakdown of the incentives currently in place around the state.

a. Federal Income Tax Credit

b. Sales Tax Exemption

The State of Colorado has exempted its residents from paying any sales tax on the purchase of solar-related equipment. Pretty great, isn’t it?

c. Net Metering

Net metering (Hyperlink: Net Metering) allows you to sell the excess power your system generates to your utility company. Some states have shelved this policy but not Colorado. With one of the best net metering policies countrywide, the Centennial State gives you the freedom to generate as much power as your system can. If it is more than what you use and your batteries can store, sell it to your utility. To do so, a meter will be installed at your residence, which will move forward when you draw electricity from the grid. It will run backward when you give the grid your excess power. At the end of the month, if you generated more than you used, you will be given energy credits for every bit of that.

d. Property Tax Exemption

You must know that if you install a solar system in your home, it increases the value of your home by 3-4%. But thanks to Colorado State, that added home value is exempted from property tax. Another incentive for you is to save more and reap the benefits of solar energy.

7. Florida

Florida is one of the ideal states to go solar in. It is rightly called the Sunshine State—it receives 71% of sunshine every day. According to the Solar Energy Industries Association, Florida stands 3rd in the 2020 National Solar Ranking. It has a total of 5,580 megawatts of solar power installed, giving free electricity to around 700,000 homes. The share of solar power in Florida’s energy mix is 2.34%. But given the enormous potential and the ideal climate, this is not enough.

The state government is taking steps to diversify its energy mix. There is a plan on the cards, if approved, will require that 100 percent of the state’s electricity comes from renewable energy resources. To encourage its residents to turn to renewable energy, there are some stimulus programs offered by the state. Below is an outline of the incentives currently available for homeowners who wish to go solar.

a. Federal Income Tax Credit

b. Net Metering in Florida

Net metering (Hyperlink: Net Metering) is a billing arrangement through which solar power users can sell their surplus power to the grid. Many states have this policy, including Florida. You can generate as much power as you want. If this power is more what you use and your batteries can store, sell it to your utility. To do so, a meter will be installed at your residence, which will move forward when you draw electricity from the grid. It will run backward when you give the grid your excess power. At the end of the month, if you generated more than you used, you will be given energy credits for every bit of that. Florida Power and Light (FPL), Duke Energy, and Tampa Electric (TECO) are some of the utilities that offer net metering arrangements.

c. Property Tax Exemption

After installing a solar system on your rooftop in Florida, on average, the value of your home increases by 4%. But does the property tax applies to this increased value of your home? Thankfully, not in Florida. Lawmakers have made sure that your home’s increased value is 100% exempted from your property taxes in Texas.

d. Sales Tax Exemption

Like property tax exemption, you do not need to pay any sales tax while installing a solar power system in Florida. This means that you save 6%, the sales tax in Florida right at the moment you buy your solar panel system. Great it is, isn’t it?

8. New Jersey

According to the US Energy Information Administration, New Jersey stands at the 7^th spot in the 2020 National Solar Ranking. At present, there is a total of 3,386 megawatts of solar power installed in the state, powering around 556,472 homes. This means that almost 5.5% of the State’s entire electricity comes from solar energy. The State of New Jersey is taking commendable steps to diversify its energy mix. As a part of the plan, it has one of the aggressive Renewable Portfolio Standard (RPS). The RPS requires that 22.5% of the state’s total energy needs should come from qualified renewable energy resources, solar being the most notable of all. To encourage its residents to go solar, the state government has offered some of the best solar incentives in New Jersey. Below is a brief outline of the incentives currently in place around the state.

a. Federal Income Tax Credit

b. Net Metering

Net metering (Hyperlink: Net Metering) maximizes your solar investment. How does it do so? By allowing you to sell the excess power, your system generates to your utility company. Some states have shelved this policy but not New Jersey. With one of the best net metering policies countrywide, New Jersey gives you the freedom to generate as much power as your system can. If it is more than what you use and your batteries can store, sell it to your utility. To do so, a meter will be installed at your residence, which will move forward when you draw electricity from the grid. It will run backward when you give the grid your excess power. At the end of the month, if you generated more than you used, you will be given energy credits for every bit of that. Read more here about Net Metering in New Jersey.

c. Transition Renewable Energy Certificates

Renewable Portfolio Standard (RPS) in New Jersey requires that utilities must generate a portion of power from renewable energy resources. To meet this demand, the utilities buy power from homeowners who have installed a solar power system in their homes. When you install a solar energy system, you just don’t generate electricity for your own needs. But for everyone, one megawatt-hour power your system produces, you get one TREC (Transition Renewable Energy Certificate). These TRECs can be sold in the market to utilities so that they can meet their RSP requirements. At the moment, one TREC is sold at around $92. This means that if you have installed a solar power system, you can earn up to $500, or more depending on the size of the system, a year.

d. Property Tax Exemption

A solar panel system adds value to the home. A typical 5kW solar panel system can add about $20,000 to your home’s resale value in New Jersey. But does the property tax applies to this increased value of your home? Thankfully, not in the Garden State. Lawmakers of New Jersey have made sure that your home’s increased value is 100% exempted from your property taxes.

e. Sales Tax Exemption

In New Jersey, you do not need to pay any sales tax while installing a solar power system. This means that you save 7%, the sales tax in New Jersey right at the moment you buy your solar panel system.

9. Illinois

The prices of solar panels have fallen by 38 percent over the last five years in Illinois. According to the Solar Energy Industries Association, Illinois stands at the 28^th spot in the 2020 National Solar Ranking. At present, there is a total of 307 megawatts of solar power installed in the state, giving free electricity to around 46,000 homes. This means that a mere 0.21 percent of the State’s entire electricity comes from solar energy.

But this is not enough, and the State government realizes this. To make more of the solar potential in the state, the government is taking commendable steps to diversify its energy mix. As a part of the plan, it set a target that requires 25 percent of the state’s electricity comes from renewable energy resources. To encourage its residents to go solar, the state government has offered some of the best solar incentives. Below is a brief outline of the incentives currently in place around the state.

a. Federal Income Tax Credit

b. Net Metering

Net metering (Hyperlink: Net Metering) in Illinois is a billing arrangement through which solar power users can sell their surplus power to the grid. Many states have this policy, including Illinois. If your system’s generation capacity is less than 2MW, you are eligible for this program. If the power generated by your system is more than what you use and your batteries can store, you can sell it to your utility. To do so, a meter will be installed at your residence, which will move forward when you draw electricity from the grid. It will run backward when you give the grid your excess power. At the end of the month, if you generated more than you used, you will be given energy credits for every bit of that. Read more about net metering in Illinois here.

c. Solar Renewable Energy Credit

The Renewable Portfolio Standard (RPS) in Illinois requires that 25% of the state’s energy must come from renewable energy resources by 2025. To do so, the utility companies in the state buy Solar Renewable Energy Credit from the homes where a solar power system is installed. When a solar power system generates one megawatt-hour electricity, the user is given one SREC. You can sell these credits to your utility company later. Also known as Illinois Shines, this program is set to be here for 15 years—which makes this program an attractive incentive for giving a decent income source to homeowners.

d. Property Tax Exemption

Illinois’ Property Tax Code exempts its residents from paying any sales tax on the purchase of a solar power system. It is worth noting that installing a solar energy system increases the value of your home by 3-4%. But that added value is exempted from your property tax.

10. Wisconsin

Solar power has made a lot of strides in Wisconsin in recent years. According to the Solar Energy Industries Association, it stands 35^thin the 2020 National Solar Ranking. It has a total of 217 megawatts of solar power installed, facilitating around 35,000 homes. It has great potential for solar, which is not exploited to the fullest. The current share of solar power in the state’s total energy is merely 0.30 percent. An average home can save more than a thousand dollars by going solar in Wisconsin.

The state leaders are taking steps to encourage the residents to go solar. To realize this goal, there have been some stimulus programs in place. Below is an outline of the incentives homeowners can earn by going solar.

a. Federal Income Tax Credit

b. Net Metering in Wisconsin

Net metering (Hyperlink: Net Metering) is a billing arrangement through which solar power users can sell their surplus power to the grid. Some states have shelved this regulatory policy but not Wisconsin. All investor-owned and municipal utilities have to offer the net metering facilities to the residents of the Badger State. The electric cooperatives are, however, excluded from this requirement. The rates vary from utility to utility. But a general rule is, when your system generates excess power, your utility buys that power at the retail rate and gives you credits that can be used next month. It is to be noted that the system’s capacity should not exceed 20kW—some may allow larger systems as well. Please check with your utility or fill in this form (hyperlink: Form), and one of our consultants will apprise you in detail about the incentives you may be eligible for.

c. Focus on Energy Incentive

This is another great incentive that the residents of Wisconsin can avail by going solar. Irrespective of your system’s size and total cost, you can get a $500 rebate on your residential solar power system. This further decreases your cost. You can get more details here

d. Property Tax Exemption

A solar panel system adds value to the home. A typical 5kW solar panel system can add about $20,000 to your home’s resale value in New Jersey. But do the property tax applies to this increased value of your home? Thankfully, not in the Badger State. Lawmakers here have made sure that your home’s increased value is 100% exempted from your property taxes.

d. Sales Tax Exemption

In Wisconsin, you do not need to pay any sales tax while installing a solar power system. This means that you save 5%, the sales tax in Wisconsin right at the moment you buy your solar panel system. Small savings can have a bigger impact!

11. Massachusetts

If there is one state that provides the most aggressive solar incentives, it has to be Massachusetts. Given that solar saves the environment as well as money, rooftops are turning blue faster than we imagined. According to the Solar Energy Industries Association, Massachusetts stands at the 8^th spot in the 2020 National Solar Ranking. It has a total of 2,850 megawatts of solar power installed, giving energy independence to around 490,000 homes.

Much better than the others, the share of solar power is 17.38 in Massachusetts’ energy mix. To diversify it even further, the state is making commendable efforts to encourage more residents to switch to renewable energy. The state government has offered some great stimulus programs to homeowners who wish to go solar to meet the goal. Below is a brief outline of the incentives currently in place around the state.

Federal Income Tax Credit

Net Metering in Massachusetts

Net metering (Hyperlink: Net Metering) maximizes your solar investment. How does it do so? By allowing you to sell the excess power, your system generates to your utility company. Some states have this regulatory policy, including Massachusetts. In the Bay State, the investor-owned utilities have to provide net metering to residents with a solar system installed. This is voluntary for municipal utilities, however. Massachusetts has three net metering facilities. One, Class-I, which allows up to 60kW systems to net meter. Two, Class-II, which allows greater than 60kW and lower than 1MW. Three, Class-III facilities with system sizes ranging from 1MW to 2MW. The rates may vary depending on your utility. Please check with your utility or fill in this form (hyperlink: Form), and one of our consultants will apprise you in detail about the incentives you may be eligible for.

SMART Program

The Solar Massachusetts Renewable Target (SMART) is a great program by the Massachusetts Department of Energy Resources to encourage solar development in the state. The initial target of this program was to support solar installation up to 16MW in the state. But recently, this was doubled given the continuing harmful effects of climate change. Through this program, the solar homeowners will be paid a fixed amount—which varies depending on the block you lie in and your system’s size— per each kilowatt-hour your solar energy system generates for the next 10 years. To qualify, you need to have a system less than 25kW—and most of the residential systems are less than 25kW. Read more on the blocks and how to qualify here or fill in this form (hyperlink: Form) and one of our consultants will apprise you in detail about the incentives you may be eligible for.

Massachusetts Income Tax Credit

Massachusetts is one of the few states that provide the most incentives. Other than the Federal Income Tax Credit (FITC), the residents can avail of a 15% tax credit off the net cost of your solar power system. This credit is capped at $1,000. Coupled with the FITC, you save a lot on going solar in Massachusetts.

Property Tax Exemption

A solar panel system adds value to the home. A typical 5kW solar panel system can add about $20,000 to your home’s resale value. But does the property tax applies to this increased value of your home? Not in Massachusetts. Lawmakers have made sure that in Massachusetts, your home’s increased value is 100% exempted from your property taxes.

Sales Tax Exemption

The State of Massachusetts has exempted its residents from paying any sales tax on the purchase of solar-related equipment. Pretty great, isn’t it? You save 6.25% right from day one.

12. Utah

Utah is one of those seven states that have the highest potential for solar power. Others are California, Arizona, New Mexico, Nevada, Texas, and Colorado. As per the Solar Energy Industries Association, Utah stands 11^th in the 2020 National Solar Ranking. It has a total of 1,800 megawatts of solar power installed, giving energy independence to around 350,000 homes. This accounts for 7.85 percent of the state’s total energy.

Given the tremendous potential, the state government is taking steps to add more solar power to the energy mix. To encourage its residents to turn to renewable energy, there are some stimulus programs offered by the state. Below is an outline of the incentives currently available for homeowners who wish to go solar.

Federal Income Tax Credit

Solar Tax Credit

Another great incentive in Utah is the Solar Tax Credit. Now, you can avail 25% of your system’s total cost back in the form of an income tax credit. The maximum you can claim is $1,600 till the end of 2020. This is a phased program, and the maximum value of this credit decreases every year. Next year, it will be $1,200; $800 in 2022, $400 in 2023 and no credit in 2024. If you are planning to go solar in Utah, 2020 is the best year. You can claim a whopping 26% Federal Income Tax Credit and $1,600 from the State government.

Net Metering in Utah

Net metering (Hyperlink: Net Metering) is a billing arrangement through which solar power users can sell their surplus power to the grid. Many states have this regulatory policy enacted, including Utah. If you are a homeowner and have a system installed—or planning to install one—with a capacity less than 25kW, you are eligible for net metering in Utah. Rocky Mountain Power and other utilities provide this facility to their consumers. Does your system generate more than you need? Fret not! Your utility will buy this excess power from you and give you either cash or energy credits in return.

13. Rhode Island

According to the Solar Energy Industries Association, Rhode Island stands at the 29^th spot in the 2020 National Solar Ranking. It has over 205 sunny days, including partly sunny days, making it one of the ideal states for solar energy. At present, there is a total of 305 megawatts of solar power installed in the state, powering around 57,200 homes. This means that 4% of the State’s entire electricity comes from solar energy. The Renewable Energy Standard (RES), however, requires that by 2019, 16% of our energy needs should have come from renewable energy resources. This goal was revised in 2016, setting a statewide target of 38.5% renewable energy by 2035.

Given that the Ocean State offers the best incentives in the country for going solar, this target could be achieved. Below is a brief breakdown of the incentives offered to homeowners who wish to go solar.

Federal Income Tax Credit

Rhode Island Renewable Energy Fund

The State of Rhode Island has made sure to leave no stone unturned when it comes to encouraging its residents to go solar. Another great incentive for you is the Renewable Energy Fund. This grant program gives homeowners $0.85 per watt through the installing company. This means that with a standard 5kW solar panel system, around $4,000 will be returned to you. For 2020, the maximum amount you can claim in the grant is $7,000. Coupled with the Federal Income Tax Credit, these incentives may cover half the cost, or maybe more, of your system.

Net Metering in Rhode Island

Yet another incentive to go solar in Rhode Island is net metering (Hyperlink: Net Metering). It is a regulatory policy that maximizes your solar investment. How does it do so? By allowing you to sell the excess power your system generates to your utility company. Some states have this arrangement, including Rhode Island. In Rhode Island, you can use your surplus power to your utility—up to 125% of your monthly usage. In return, you will be given the energy credits which you can roll over to the next month. This is great because it not only eliminates your electric bill but can also be a source of more savings as you sell your surplus power. There is one problem, though. As of 2020, the municipal and cooperative electric are exempt from giving the net metering facility to their consumers.

Sales Tax Exemption

For many shoppers, sales tax may be a deterrent. But what if we told you that there is no sales tax on solar shopping in Rhode Island? Yes. You are exempted from paying any sales tax if you wish to install a solar system. You save 7%, the sales tax in Rhode Island, right on day one.

Property Tax Exemption

After installing a solar system on your rooftop in Florida, on average, the value of your home increases by 3-4%. But do the property tax applies to this increased value of your home? Thankfully, not in Rhode Island. Lawmakers have made sure that in Rhode Island, your home’s increased value is 100% exempted from your property taxes.