When it comes to determining how much money you can save by installing solar panels for your home, one of the crucial factors is which government solar energy incentive programs you have access to. Each state has its own rules and regulations for residential solar systems — for instance, California solar incentives differ from Florida solar incentives. Depending on which solar incentives you use, you can save even more money with a home solar system installation than you might think!
To help you understand the different programs available across the country, we narrowed down the list of solar energy incentive programs to the top handful that you should know about before installing your own solar panels. Let’s take a look at each of these valuable programs and discuss how they can make solar energy even more affordable.
Residential Renewable Energy Tax Credit
First up is the Residential Renewable Energy Tax Credit, as described in the Consolidated Appropriations Act of 2021. This incentive provides tax credits for solar energy systems, as well as fuel cells, geothermal heat pumps, and small-scale wind turbines. As one of the most popular federal residential solar incentives in existence today, this program provides a 26% tax credit for all solar energy systems installed before January 1, 2023. For systems placed in service after that date, homeowners still receive a 22% credit. Homeowners are eligible for this program whether they live in pre-existing homes or newly constructed houses, and the program applies to both first and second homes.
Solar Renewable Energy Certificate (SREC)
Another popular solar incentive is the Solar Renewable Energy Certificate (SREC) program, which allows homeowners to sell energy to their utility provider in the form of certificates. Each certificate represents 1,000 kilowatt-hours, and their value can exceed $300 in some areas. Currently, more than half of all U.S. states have SREC programs, although not all of them are considered to be “active” markets, meaning that some states are no longer accepting applications.
Performance-Based Incentive (PBI)
A somewhat similar program is the performance-based incentive or PBI. These solar incentives provide homeowners with payment based on how much energy their residential solar power systems generate. Typically, PBIs are paid out on a monthly or yearly basis over a predetermined amount of time (in California, for example, incentives are paid over five-year periods) at a set dollar-per-kWh ratio. Because these solar energy incentive programs pay based on a system’s actual output, they encourage homeowners to maintain their systems in prime condition, as systems with subpar energy generation are not incentivized as much.
Subsidized Solar Loans
Subsidized solar loans have gained in popularity in recent years, as homeowners look for alternatives to solar lease agreements and up-front cash purchases. These solar incentives are quite similar to typical home improvement loans, with one major caveat: a solar loan not only increases the value of your home (much like a newly remodeled bathroom or a new wraparound porch), but it also generates energy, which puts money directly into your pocket. In this way, subsidized solar loans are truly the best of both worlds.
Solar Rebates by State
Next, let’s briefly discuss solar rebates by state. While we’re not going to run down each and every rebate available on a state-specific basis in the United States, we will quickly touch on a few of them, starting with California solar incentives. This is one of the most popular states for residential solar systems, and a quick look at the state’s solar energy incentive programs illustrates why.
California offers a statewide net metering policy to help homeowners save money by selling their excess energy back into the grid. In addition, the state provides residents with Property Assessed Clean Energy (PACE) financing, which helps homeowners pay for energy-efficient home upgrades, such as solar panel installations. If that’s not enough, California also provides property tax exemptions for residential solar energy systems, exempting the entire value of the solar system from the owner’s property tax responsibilities.
How about Florida solar incentives? While residential solar systems aren’t quite as popular in this sunny state as they are in the similarly cloud-free California, Florida has some intriguing government solar energy incentive programs of its own. For instance, Florida has a similar net metering policy to California’s, and it also provides homeowners with exemptions for both property taxes and sales taxes. This makes solar installations cheaper up-front and into the future.
Texas solar incentives are another interesting case study. The only statewide solar incentive in this state is a property tax exemption. However, that doesn’t mean you can’t take advantage of any other government solar energy incentive programs. That’s because several of the state’s largest municipalities — including Austin, Dallas, and San Antonio — offer solar rebates to help homeowners deal with the up-front costs of residential solar energy system installations.
As you can see, there are quite a few different solar incentives available to homeowners today. While some of them can be accessed on a nationwide basis, some others are only available on a state-specific basis. This is just one of the many reasons that you should partner with a reputable solar installation company like LGCY Power.
Here at LGCY Power, our representatives know all the details of the solar energy incentive programs available to you. We can help you plan out your system in a way that takes advantage of every solar incentive you can access in your state, increasing the productivity and profitability of your residential solar system. For more information, give us a call today at 855.649.4019 and consult with one of our expert team members!