Solar Incentives & Rebates
Investing in solar energy
Investing in solar energy is more than just an environmentally responsible choice—it’s also a smart financial move, especially in today’s energy landscape.
As of 2025, a wide range of federal, state, and local incentives are available to help homeowners, businesses, and institutions offset the initial cost of going solar.
These programs are designed to make renewable energy more accessible by reducing installation expenses, improving long-term savings, and accelerating return on investment.
At M&B Solar Consortium, we help our clients navigate the complex world of solar incentives, ensuring they take full advantage of every opportunity available.
Federal Solar Incentives
Investment Tax Credit (ITC)
The federal Investment Tax Credit (ITC) remains a cornerstone incentive for solar adopters. As of 2025, the ITC allows homeowners and businesses to deduct 30% of the cost of installing a solar energy system from their federal taxes. This incentive is available for systems installed through 2032, after which it is scheduled to decrease to 26% in 2033 and 22% in 2034. There is no cap on the credit amount, making it a substantial benefit for larger installations. ?
Key Points:
- Eligibility: Applies to both residential and commercial solar installations.?
- Coverage: Includes costs related to solar panels, inverters, mounting equipment, and labor.?
Cedar Creek Energy - Claim Process: The credit is claimed when filing annual federal tax returns.?
SolarReviews
Production Tax Credit (PTC)
For commercial projects, the Production Tax Credit (PTC) offers an alternative to the ITC. The PTC provides a per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy facilities, including solar, for the first ten years of operation. As of 2025, the PTC rate is approximately 2.6 cents per kWh, adjusted for inflation. ?
Key Points:
- Eligibility: Primarily available for utility-scale and large commercial projects.?
- Choice: Projects can choose between ITC and PTC, depending on which is more financially beneficial.
State and Local Incentives
In addition to federal incentives, many states and local governments offer programs to further reduce the cost of solar installations. These incentives vary widely by location and can include:?
State Tax Credits
Some states offer tax credits that can be claimed in addition to the federal ITC. For example, New York provides a state tax credit of up to 25% of the system cost, capped at $5,000. ?
Sales and Property Tax Exemptions
To encourage solar adoption, certain states exempt the added value of a solar system from property taxes and waive sales tax on the purchase of solar equipment. For instance, many states offer a 100% exemption from sales tax for solar energy systems. ?
Solar Renewable Energy Certificates (SRECs)
In some regions, solar system owners can earn Solar Renewable Energy Certificates (SRECs) for the electricity their systems produce. These certificates can be sold to utilities or other entities, providing an additional income stream. States like New Jersey and Maryland have active SREC markets. ?
Utility Rebates
Certain utility companies offer rebates to customers who install solar panels. These programs often have limited funding and may be available on a first-come, first-served basis. For example, some utilities provide rebates based on the system’s capacity, such as a per-watt rebate.
Additional Incentives
Battery Storage Incentives
Starting in 2023, the federal ITC also applies to standalone battery storage systems. This inclusion allows homeowners and businesses to claim the 30% tax credit for installing energy storage solutions, enhancing energy independence and resilience. ?
Low-Income and Community Programs
Programs like Solar for All aim to make solar energy accessible to low-income households and disadvantaged communities. These initiatives provide grants and support for community solar projects, enabling participants to benefit from solar energy without installing systems on their properties. ?
By leveraging these incentives and rebates, the transition to solar energy becomes more financially accessible, accelerating the move toward a sustainable energy future.
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