Installing a home solar power system can help individuals save a significant amount of money in the long run. That said, initial expenses like installation are still high, even with a 40% price decrease in recent years. To redress this, federal and state governments have created solar incentives to help people deal with the heightened costs. This article sheds insight into the solar incentives available across states and their important aspects. Here’s what to know:

Top states for solar incentives in 2023
The government introduced the Inflation Reduction Act in 2022, with one of its focuses on reducing energy consumption.

• California
• Texas
• Florida
• North Carolina
• Nevada
• Arizona
• Georgia
• New York
• Virginia
• Massachusetts
• Maryland
• Connecticut
• Ohio
• New Jersey

Those residing in a state that is not listed can contact an energy advisor or check with their local governing authority to see whether they can avail themselves of the solar panel incentive program and learn more about the associated solar incentives.

Common types of solar incentives
Those who want to install solar panels in their homes or in a commercial setting can reap the benefits of various solar incentives. Here are some of the most common federal and state solar panel incentive types.

• Tax credits
  Tax credits impact how much an individual owes in federal taxes. One does not receive a check in the mail or cash back when applying for a tax credit, such as the Residential Clean Energy Credit case. The individual receives a percentage or set dollar amount in credit on their federal tax return, which brings down the amount they owe in taxes. If a tax burden exceeds the credit, one might receive a refund on the income taxes paid.
• Rebates
  Residents can qualify for rebates, which offer a certain amount of money if they purchase a solar electricity system or a qualifying piece of technology. Rebates are usually offered at the state, local, or installer levels. One could qualify for a solar rebate even if they owe nothing in federal taxes.
• Low-interest loans
  In a few states, utilities and solar installation companies offer low-interest loans designed for residents who wish to purchase a solar system. The loan helps one finance their solar panel needs, which makes the initial purchase comparatively easier. Though one has monthly loan payments to make, the loans come with a lower interest rate.

Solar panel assistance program
Assistive programs, such as the Weatherization Assistance Program (WAP) available in Colorado, offer no-cost solar installations to qualifying applicants. The program aims to help low-income households reduce energy costs by increasing their homes’ energy efficiency. The WAP aims to save each client with rooftop PV more than $400 annually by reducing electricity costs. The solar panels will also be installed in a limited number of qualifying households to ensure an exceptional return on investment. One could contact a local agency or governing body to apply for the Weatherization Assistance Program.

Solar referral program
A referral program helps the solar company acquire leads while giving the referrer fair incentives. An existing customer might be asked to share the solar panel products with their friends and family members to earn rewards. A few benefits include discounts or cash rewards in exchange for these leads.

Solar Massachusetts Renewable Target program
The Solar Massachusetts Renewable Target (SMART) program is created by the state’s Department of Energy Resources (DOER). It offers a long-term incentive program that promotes cost-effective solar development and savings for eligible homes. Under the SMART program, the state’s three investor-owned utilities, National Grid, Eversource, and Until, directly compensate participating solar system owners for their solar power generation. This compensation is paid monthly via direct bank deposit or mail over a 10-year term. The compensation rate is determined when a participant enrolls and is locked in for the 10-year duration of the program.

Solar Renewable Energy Certificates (SRECs)
SRECs are credits that an individual receives based on the amount of energy generated by the solar panel. In a few states, public utility companies must purchase a set amount of SRECs from consumers to meet renewable energy goals. Based on where one lives, they might be able to sell the solar renewable energy certificates to the utility company in exchange for cash.

Performance-based incentives
A few states offer performance-based incentives (PBIs), which give solar owners a set cash amount for every kilowatt-hour their solar system generates. Solar systems paid through this system must have metering technology installed to measure the system’s output. California is one state that uses the PBI approach. Through the California State Initiative, incentives are paid monthly over five years based on the actual energy (kWh) produced by the solar energy system. One should also note that the incentive rate ($/kWh) should stay constant for the contract term.