SOLAR INCENTIVES
Your system can pay for itself in just a few short years.
Whether you purchase a solar power system, lease one, or buy solar electricity through a service agreement, federal, state, and utility incentives make solar economics compelling! When using a lease or PPA program, you do not even have to make an up-front investment and can start enjoying net electricity savings from Day 1. Available incentives, combined, can equal up to 70% of the cost of your solar energy system.
Federal Investment Tax Credit (ITC) – 30%*
The Solar Investment Tax Credit (ITC) is a dollar-for-dollar reduction in the income taxes that a company or property owner claiming the credit owes and/or has paid to the federal government. The Federal ITC is equal to 30% of eligible costs to install the solar power system.
* This material is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
State Incentives
Significant incentives are available in most states. Depending on where your property is located, in addition to the 26% ITC, your company might be able to qualify for up to a 70% cost savings with total available Solar Tax Incentives. Please view incentives below.
Federal Solar Investment Tax Credit (ITC) – The 26% federal solar tax credit is available for properties that purchase and have their system installed by December 31, 2022. In 2023, the solar tax credit drops to 22%. In 2024 it will be fixed at 10% for commercial properties and permanently end for residential properties.
Net Metering – New Jersey is a leader in state net metering programs. Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system. When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
Renewable Energy Credits – The Board of Public Utilities (BPU) New Jersey’s Clean Energy Program lets property owners earn Renewable Energy Certificates, for every kilowatt-hour (kWh) of solar energy the system creates based on market value.
Solar Investment Property Tax Exemption – Installing a solar energy system will boost the value of your property but your property taxes won’t go up This tax exemption adds additional value to your property.
Solar Panel System Sales Tax Exemption – All components of your solar energy system are exempt from sales tax.
Federal Solar Investment Tax Credit (ITC) – The 26% federal solar tax credit is available for properties that purchase and have their system installed by December 31, 2022. In 2023, the solar tax credit drops to 22%. In 2024 it will be fixed at 10% for commercial properties and permanently end for residential properties.
Net Metering – New York State operates an annual form of net metering. Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system. When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
NY State Solar Energy System Equipment Tax Credit – There is a 25% New York State solar tax credit available for solar energy systems installed in New York State. Maximum of $5,000.
NY-Sun Megawatt (MW) Block Program – Property owners can qualify for compensation for every kilowatt (kW) of solar energy installed (up to $1,000).
Solar Electric Generating System Tax Abatement (SEGS) – Installing a solar energy system will boost the value of your property but your property taxes won’t go up This tax exemption adds additional value to your property.
Residential Solar Project Sales Tax Exemption – State sales tax exemption for components of residential solar energy system.
Federal Solar Investment Tax Credit (ITC) – The 26% federal solar tax credit is available for properties that purchase and have their system installed by December 31, 2022. In 2023, the solar tax credit drops to 22%. In 2024 it will be fixed at 10% for commercial properties and permanently end for residential properties.
Net Metering – Connecticut property owners can access a form of Net Metering (Net Billing) through privately owned energy companies. Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system. When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
Solar Investment Property Tax Exemption – Installing a solar energy system will boost the value of your property but your property taxes won’t go up This tax exemption adds additional value to your property.
Solar Project Sales Tax Exemption – State sales tax exemption for components of solar energy system.
Residential Solar Investment Program – Connecticut homeowners can qualify for compensation for every watt of solar energy installed (up to $0.46 per watt based on system size).
Federal Solar Investment Tax Credit (ITC) – The 26% federal solar tax credit is available for properties that purchase and have their system installed by December 31, 2022. In 2023, the solar tax credit drops to 22%. In 2024 it will be fixed at 10% for commercial properties and permanently end for residential properties.
Net Metering – Pennsylvania has a strong net metering programs and allows virtual net metering for property owners with multiple solar sites. Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system. When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
Renewable Energy Credits – Property owners can earn Renewable Energy Certificates, for every kilowatt-hour (kWh) of solar energy the system creates based on market value.
Philadelphia Solar Rebate Program – Philadelphia property owners can qualify for a $200 rebate for every kilowatt (kW) of solar energy installed.
Federal Solar Investment Tax Credit (ITC) – The 26% federal solar tax credit is available for properties that purchase and have their system installed by December 31, 2022. In 2023, the solar tax credit drops to 22%. In 2024 it will be fixed at 10% for commercial properties and permanently end for residential properties.
Net Metering – Maryland has an annual (April to April) net metering program. Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system. When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
Renewable Energy Credits – Property owners can earn Renewable Energy Certificates, for every kilowatt-hour (kWh) of solar energy the system creates based on market value.
Solar Investment Property Tax Exemption – Installing a solar energy system will boost the value of your property but your property taxes won’t go up This tax exemption adds additional value to your property.
Residential Solar Project Sales Tax Exemption – State sales tax exemption for components of residential solar energy system.
Residential Clean Energy Rebate Program (R-CERP) – Maryland residents who purchase and install a residential solar energy system can qualify for a $1,000 rebate.
Federal Solar Investment Tax Credit (ITC) – The 26% federal solar tax credit is available for properties that purchase and have their system installed by December 31, 2022. In 2023, the solar tax credit drops to 22%. In 2024 it will be fixed at 10% for commercial properties and permanently end for residential properties.
Net Metering – Florida property owners can access a form of Net Metering through private utility providers. Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system. When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
Solar Investment Property Tax Exemption – Installing a solar energy system will boost the value of your property but your property taxes won’t go up This tax exemption adds additional value to your property.
Residential Solar Project Sales Tax Exemption – State sales tax exemption for components of residential solar energy system.
Depreciation Deduction*
Not only do solar power systems return 26% of their cost back in the form of a federal tax credit, but they also have an asset basis of 87% of the purchase price. This basis can be deducted from commercial taxable income. For federal tax, all of the depreciation can be taken in the first year. For state tax, the depreciation can usually be used over six years.
*This material is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction
Net Metering
Net metering allows the electric grid to store the electricity produced by your solar energy system to use at a later time and helps maximize the investment in your system.
When your solar panels produce more electricity than your property uses during the day, the unused electricity is sent back to the grid. When your property uses more electricity than your solar panels produce, your property draws electricity from the grid. At the end of your billing cycle, your property is charged for the balance or “net” of what you put into the grid vs. what you took off the grid.
A properly designed solar energy system will produce enough electricity to cover a large percentage of your property’s annual usage. The amount of electricity your system generates will range based on the amount of sun it receives throughout each season. Net metering credits higher producing months against the lower producing ones.
You solar advisor can further explain how Net Metering will enhance your solar savings.
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