Solar Incentives By State 2020

Solar power is energy converted from the sun to thermal or electrical energy. Solar power is a renewable power source that is clean, inexpensive, and readily available everywhere in the world. Because solar energy comes from the sun, it represents an infinite source of energy.

The most common way solar energy is captured is by using photovoltaic (PV) solar panels. PV panels generate electricity directly from sunlight via semiconductors. When the silicon photovoltaic solar cell absorbs solar radiation, photons strike and ionize semiconductor material on the solar panel, causing electrons to break free of their atomic bonds. Electrons are forced to flow in one direction, creating a flow of electrical current. Only some of the light spectrum is absorbed, while other parts of the spectrum are reflected, too weak (infrared), or create heat instead of electricity (ultraviolet).

The first PV device was introduced in 1954 by Bell Labs in the United States. Interest in using solar energy increased during the 1970s due to the energy crisis; however, the cost of their implementation made large-scale application impractical. Today, the price of PV devices has dropped dramatically, falling more than 59% over the last decade. Additionally, solar panels can be financed.

Solar power has several benefits such as eliminating electrical bills and avoiding utility inflation. The use of solar panels also protects the environment, creates jobs, and helps the U.S. become energy-independent. Additionally, many states offer tax incentives, rebates, and credits for installing solar panels on homes.

Solar Energy Incentives by State

State solar incentives are in addition to the Solar Investment Tax Credit that allows solar panel owners to recoup 26% of their equipment and installation costs for an unlimited amount.

In addition to rebates, credits, and exemptions, states may offer Solar Power Performance Payments, also known as production incentives, which provide small cash payment based on the amount of energy produced by a renewable energy system. These are measured in the number of kilowatt-hours (kWh) or BTUs generated by a renewable energy system multiplied by whatever the cash rate is.

Alabama

  • Alabama does not currently have any policies to provide renewable energy tax credits, has no sales tax exemptions for solar, and no property tax exemptions
  • Alabama offers a Solar Power Performance Payment

Alaska

  • Alaska does not offer state rebates for solar power.
  • Because Alaska does not have state income tax, it does not offer state tax credits.
  • Alaska offers limited Solar Power Performance Payments.

Arizona

  • The Residential Arizona Solar Tax Credit reimburses you 25% of the cost of your solar panels, up to $1,000, off of that year’s personal income tax statement.
  • There is no sales tax on solar panel equipment.
  • There is no additional property tax for the value solar panels add to your home.
  • Arizona does not offer Solar Power Performance Payments.

Arkansas

  • Arkansas does not offer state energy rebates.
  • Arkansas does not offer state income tax credit.
  • Arkansas does not offer property tax exemptions.
  • Arkansas does not offer Solar Power Performance Payments.

California

  • California has an extensive solar rebate program through the California Solar Initiative (CSI). Local solar rebates can range from $500 to $0.95 per watt of installed capacity.
  • California has a Property Assessed Clean Energy (PACE) financing program that allows homeowners to finance their solar panels and pay it back through their property taxes. Additionally, California offers property tax exemptions for solar installation.
  • There are no state income tax credits.
  • California does not offer sales tax exemptions on solar panel equipment.

Colorado

  • Colorado has a state rebate program that ranges anywhere from $400 to $3,000.
  • There are no state income tax credits.
  • Colorado offers Solar Power Performance Payments, which is paid at a rate of $0.005 to $0.0375 per kilowatt-hour depending on the system.
  • Colorado offers both state sales tax and property tax exemptions for installed solar systems.

Connecticut

  • Connecticut has solar power rebates for systems up to 20kW in size.
  • Connecticut does not offer state income tax credits.
  • The Solar Power Performance Payment rate in Connecticut is $0.18 per kilowatt-hour.
  • There are no state income tax credits but the state has offered property tax exemptions for installed systems since 1977.
  • Connecticut offers state sales tax exemptions.

Delaware

  • Utilities in Delaware offer many rebate programs.
  • Delaware does not offer state income tax credits.
  • There is no property tax exemption for installed solar systems.
  • Because Delaware does not have a state income tax, there is no need for a sales tax exemption.
  • Delaware’s Solar Power Performance Payments are paid at a rate of $0.55 per watt of solar capacity up to 5kW and $0.20 per watt beyond 5kW.

District of Columbia

  • The District of Columbia has a strong district-wide energy rebate program.
  • There are no state income tax credits for solar installations.
  • There is no state sales tax exemption for installing a solar system but there is a property tax exemption.
  • D.C. has a Solar Power Performance Payment program.

Florida

  • Florida does not offer solar rebate programs.
  • Because there is no state income tax in Florida, there is no need for state income tax credits.
  • Florida offers both state sales and property tax exemptions for installed solar systems.
  • Florida’s performance payment rate is $0.05 per kWh.

Georgia

  • Georgia does not have a statewide rebate program for solar systems.
  • There are no sales tax or property tax exemptions for installed solar systems.
  • There are no state income tax credits.
  • Georgia offers a Solar Power Performance Payment that pays at a rate of $0.04 per kWh.

Idaho

  • Idaho does not offer statewide rebates.
  • Idaho does offer state income tax credits, which allows you to deduct 40% of the cost of the solar power project when you file income taxes.
  • Idaho does not offer state sales or property tax exemptions.
  • There is no Solar Power Performance Payment program in Idaho.

Illinois

  • Illinois offers state rebate programs for solar system installation through ComEd and Ameren.
  • There are no state income tax credits or sales tax exemptions.
  • Illinois offers a property tax exemption for installed solar systems.
  • Illinois does offer Solar Power Performance Payments at a rate of $0.071 per kWh.

Indiana

  • Indiana does not offer statewide rebates.
  • Indiana does not offer state income tax credits.
  • Idaho offers both property tax and state sales exemptions.
  • There is a Solar Power Performance Payment program in Indiana, which pays at a rate of $0.17 per kWh.

Iowa

  • Iowa does not offer state energy rebates.
  • Iowa offers state income tax credits, which allow you to deduct 18% of costs up to $5,000.
  • There are both sales tax and property tax exemptions on solar panel installations.
  • Iowa does have a performance incentive.

Kansas

  • Kansas does not offer state rebates, state tax credits, or state sales tax exemptions.
  • There is no Solar Power Performance Payment program in Kansas.
  • Kansas offers property tax exemptions for installed solar systems.

Kentucky

  • Kentucky offers state solar rebates.
  • Kentucky offers income tax credits, such as a $500 local tax credit and an additional $6,500 from initial expenses.
  • There is a Solar Power Performance Payment program in Kentucky.
  • There are no sales tax or property tax exemptions.

Louisiana

  • Louisiana does not offer state energy rebates.
  • There are no longer state income tax credits.
  • Louisiana does not offer Solar Power Performance Payments.
  • Louisiana offers property tax exemptions but does not offer state sales tax exemptions.

Maine

  • Maine does not offer state rebates, income tax credits, Solar Power Performance Payments, property tax exemptions, or sales tax exemptions.

Maryland

  • Maryland offers solar power rebates.
  • Maryland has state income tax credits for solar panel installations.
  • Maryland offers Solar Power Performance Payment programs.
  • There are both sales tax and property tax exemptions.

Massachusetts

  • Massachusetts has solar rebates that vary by locale.
  • Massachusetts has an income tax credit that covers 15% of the cost of a solar system at a maximum of $1,000.
  • Massachusetts offers Solar Power Performance Payments at a rate of $0.102 per kWh.
  • Property tax exemptions are offered for up to 20 years.
  • State sales tax exemptions are offered.

Michigan

  • Michigan does not offer state solar rebates.
  • There are no state income tax credit, property tax exemptions, or sales tax exemptions.
  • Michigan offers Solar Power Performance Payments

Minnesota

  • Minnesota offers sales tax exemption on solar system equipment.
  • Minnesota has Solar Power Performance Payments that offer $0.08 per kWh of production.
  • Minnesota offers solar rebates through seven different utilities.
  • Minnesota does not offer any state income tax credits.
  • There are property tax exemptions for installed systems.

Mississippi

  • There are no state rebates available in Mississippi for solar; however, the state offers rebates to Tennessee Valley Authority customers.
  • There are no state income tax credits, property tax exemptions, or state sales tax exemptions.
  • Mississippi’s production incentive pays $0.12 per kWh.

Missouri

  • Missouri offers state rebates for solar systems through three electric utilities.
  • Missouri does not offer state income tax credit or sales tax exemption but does offer property tax exemptions.
  • There are no production incentives in Missouri.

Nebraska

  • Nebraska offers state rebates, though they are minimal.
  • Nebraska offers a state income tax credit, which has a value of just $0.0005 per kWh.
  • There are no state sales tax or property tax exemptions.
  • There is no production incentive program in Nebraska.

Nevada

  • Nevada has a state rebate program for solar.
  • Because there is no state income tax in Nevada, there is no state income tax credit.
  • Property tax exemptions are only offered for solar farms.
  • There are no state sales tax exemptions.
  • Solar systems above 25kW are eligible for a production incentive ranging from $0.026 to $0.052 per kWh.

New Hampshire

  • New Hampshire has solar power rebates for systems up to 10kW in size.
  • Because there is no state income tax and no state sales tax, there are no income tax credits and no sales tax exemptions.
  • New Hampshire offers property tax exemptions for solar installations.
  • New Hampshire does not offer Solar Power Production Payments.

New Jersey

  • New Jersey offers rebates for qualified homes and systems.
  • New Jersey does not offer state income tax credits.
  • Solar systems in New Jersey are sales tax-exempt and property tax-exempt.
  • New Jersey has a production incentive.

New Mexico

  • New Mexico offers state income tax credit for solar, which allows up to 10% of the costs of purchase and installation, up to $9,000, to be written on that year’s tax statement.
  • There are no state rebates.
  • New Mexico offers both state sales tax and property tax exemptions on solar systems.
  • New Mexico has production incentives that vary by locale.

New York

  • New York offers state income tax credits capped at $5,000.
  • There are state solar rebates.
  • There is no Solar Power Performance Payment program.
  • Solar panel installations are exempt from both state sales tax and property tax.

North Carolina

  • Rebates for solar differ in North Carolina. Duke Energy Progress offers a rebate of $250/kW and Tennessee Valley Authority (TVA) offers a $1,000 payment after installation.
  • North Carolina no longer offers state income tax credits for solar.
  • North Carolina does not offer sales tax exemptions but does offer property tax exemptions.
  • North Carolina has a production incentive.

North Dakota

  • North Dakota does not offer state rebates, state income tax incentives, or Solar Power Performance Payments.
  • North Dakota offers both state sales tax and property tax exemptions.

Ohio

  • Ohio does not offer state solar power rebates or state solar tax credits.
  • State sales tax and property tax are exempt for solar installations.
  • Ohio does have a Solar Power Performance Payments program.

Oklahoma

  • Because there is no state income tax, Oklahoma does not offer an income tax credit for solar.
  • Oklahoma does not offer state rebates.
  • The state does not offer sales tax exemptions or property tax exemptions for solar installations.
  • Oklahoma does not offer production incentive payments.

Oregon

  • Oregon offers extensive state rebate programs for solar through the Oregon Incentive Trust.
  • The Oregon state income tax credits stopped at the end of 2017.
  • Oregon offers Solar Power Performance Payment programs that vary by locale.
  • Solar installations are exempt from property tax but not state sales tax.

Pennsylvania

  • Pennsylvania offers state solar rebates.
  • State income tax credits are not offered.
  • Pennsylvania offers production incentives, which pay at $30 per megawatt-hour.
  • Pennsylvania does not offer state sales tax or property tax exemptions.

Rhode Island

  • Rhode Island has no solar power rebates.
  • Rhode Island does not offer a state income tax credit.
  • The state offers Solar Power Performance Payment that pays $0.38 per kWh.
  • Both sales tax and property tax are exempt for solar installations.

South Carolina

  • South Carolina offers an income tax credit of up to 25% of solar costs. In a single year, up to $3,500 or 50% of one’s state liability (whichever is less) can be applied.
  • South Carolina offers a solar rebate through Duke Energy, which offers $1 per watt off of the cost of a system, or Santee Cooper, which offers $1.30 per watt.
  • There is a Solar Power Performance Payment program offered.
  • There are no property tax or state sales tax exemptions.

South Dakota

  • South Dakota does not offer state solar rebates, Solar Power Performance Payments, or state sales tax exemption.
  • Solar installations are exempt from property tax.
  • Because there is no state income tax in South Dakota, there is no state income tax credit offered.

Tennessee

  • Tennessee offers state solar rebates.
  • Because there is no state income tax, there is no tax credit offered for solar.
  • Tennessee does not offer property tax exemptions for solar but offers state sales exemptions.
  • Tennessee’s production incentives pay $0.12 per kWh.

Texas

  • Texas does not offer state solar rebates but many utilities and local governments do.
  • Because there is no state income tax, no tax credits are offered.
  • Sales tax is not exempt for solar installations but property tax is.
  • Texas does not offer a production incentive.

Utah

  • Utah offers a solar tax credit of 25% of the purchase and installation costs up to $2,000.
  • There is a state rebate program for solar installations.
  • Utah does not offer a production incentive or property tax exemptions.
  • PV systems with a capacity of 2 megawatts or greater are exempt from sales tax.

Vermont

  • Vermont has no solar rebates.
  • There is no state income tax credit for solar.
  • Both sales and property tax are exempt for solar installations.
  • Vermont offers Solar Power Performance Payments at a rate of $0.01 per kWh.

Virginia

  • Virginia does not have state solar rebates but the Tennessee Valley Authority offers a $1,000 payment after installation.
  • Virginia does not offer income tax credit or sales tax exemptions.
  • There is a property tax exemption for solar installations.
  • Solar Power Performance Payment programs are offered through TVA and Dominion Power.

Washington

  • Washington does not offer statewide rebates.
  • There is no state income tax in Washington, so no tax credit is offered.
  • Solar installations are not exempt from property tax but are exempt from state sales tax.
  • Washington has production incentive payments that range from $0.08 to $0.12 per kWh depending on the size and type of equipment.

West Virginia

  • West Virginia does not offer state solar rebates, state income tax credit, production incentive payments, property tax exemptions, or state sales tax exemptions.

Wisconsin

  • Wisconsin offers solar rebates through the Focus on Energy Program.
  • There is no state income tax credit.
  • Wisconsin has both state sales tax and property tax exemptions for solar installations.
  • Wisconsin has a production incentive.

Wyoming

  • Wyoming does not offer a state rebate, a Solar Power Performance Payment program, property tax exemptions, or sales tax exemptions.
  • Because there is no state income tax, there is no tax credit.

Solar Incentives By State 2020

State 2020 Pop.
Alabama4,908,620
Alaska734,002
Arizona7,378,490
Arkansas3,039,000
California39,937,500
Colorado5,845,530
Connecticut3,563,080
Delaware982,895
District of Columbia720,687
Florida21,993,000
Georgia10,736,100
Hawaii1,412,690
Idaho1,826,160
Illinois12,659,700
Indiana6,745,350
Iowa3,179,850
Kansas2,910,360
Kentucky4,499,690
Louisiana4,645,180
Maine1,345,790
Maryland6,083,120
Massachusetts6,976,600
Michigan10,045,000
Minnesota5,700,670
Mississippi2,989,260
Missouri6,169,270
Montana1,086,760
Nebraska1,952,570
Nevada3,139,660
New Hampshire1,371,250
New Jersey8,936,570
New Mexico2,096,640
New York19,440,500
North Carolina10,611,900
North Dakota761,723
Ohio11,747,700
Oklahoma3,954,820
Oregon4,301,090
Pennsylvania12,820,900
Rhode Island1,056,160
South Carolina5,210,100
South Dakota903,027
Tennessee6,897,580
Texas29,472,300
Utah3,282,120
Vermont628,061
Virginia8,626,210
Washington7,797,100
West Virginia1,778,070
Wisconsin5,851,750
Wyoming567,025