Explore the best state incentives for solar energy in 2024. Save on installation costs and achieve the best possible return on investment you can.
Many states in the USA are offering significant incentives for homeowners to install solar panels. These incentives can dramatically reduce the upfront cost of a solar system. Cost is an important point for homeowners and incentives make solar energy more accessible. I wanted to explore what some states in the USA offer to help homeowners on their journey to cost-effective energy. Here’s a look at the top 10 states for home solar incentives.
The Top Ten Best Incentives For Home Solar By State
From California’s comprehensive approach to Colorado’s long-term vision, each state offers unique benefits.
Remember, while this information is current as of 2024, solar incentive programs are subject to change. Always consult with local solar installers or your state’s energy office for the most up-to-date information.
Let’s explore where homeowners can reduce their carbon footprint and make a sound financial investment in their property and future energy costs.
California: Self-Generation Incentive Program
The Golden State Leads the Way. California’s Self-Generation Incentive Program (SGIP) has been a cornerstone of the state’s renewable energy efforts. Originally launched in response to the 2000-01 California Energy Crisis, SGIP aims to reduce peak load and provide energy storage incentives.
Homeowners can benefit from rebates for energy storage systems, which pair seamlessly with solar panels to maximize energy savings and resilience. With California’s abundant sunshine, this program makes solar energy a highly attractive investment for residents.
As of 2024, the program provides the following incentives:
- Residential customers can receive up to $200 per kilowatt-hour (kWh) for battery storage systems.
- For a typical home battery system of 13.5 kWh (like the Tesla Powerwall), this could mean a rebate of up to $2,700.
- Low-income households in high fire-threat areas, can receive up to $1,000 per kWh, potentially covering the entire cost of the battery system.
- Rewards for early adoption. The program has a step-down structure, meaning rebates decrease as more capacity is installed.
The SGIP has been extended through 2025.
Here’s a YouTube short to put the SGIP in perspective compared to a state where there’s no such benefit.
Key Benefits:
- Rebates for battery systems
- Reduced peak load
- Enhanced energy independence
New York’s NY-Sun program
New York’s NY-Sun Megawatt Block Program is designed to expand the state’s solar capacity. The program is divided into “blocks” of megawatt capacity, with incentives decreasing as each block is filled, encouraging early adoption.
Homeowners can receive substantial rebates based on their solar installation size. This structured approach ensures a steady growth of solar installations across the state. The NY-Sun Megawatt Block Program is running until 2025 or until funding is exhausted,
Key Benefits:
- Rebates per watt of installed capacity
- Residential installations in Upstate New York currently receive $0.35 per watt of installed capacity.
- Long Island residents can get $0.15 per watt of installed capacity.
- For a typical 6kW system, this translates to rebates of $2,100 in Upstate NY or $900 in Long Island.
- Commercial installations have separate incentive rates, starting at $0.45 per watt for systems up to 50kW.
Massachusetts: Solar Massachusetts Renewable Target (SMART) Program
The Solar Massachusetts Renewable Target (SMART) Program will continue until the state reaches 3,200 MW of solar capacity. This innovative program offers performance-based incentives, paying homeowners per kilowatt-hour produced.
Additionally, SMART includes “adders” for features like battery storage or location on brownfields. Massachusetts residents can thus optimize their solar investments while contributing to the state’s renewable energy targets.
Key Benefits:
- Base compensation rates range from $0.13 to $0.35 per kWh produced, depending on utility and system size.
- For a 10kW system producing 12,000 kWh annually, this could mean between $1,560 to $4,200 per year.
- Additional “adders” are available, such as $0.05/kWh for battery storage integration.
- The program continues until the state reaches 3,200 MW of solar capacity.
South Carolina: Solar Energy Tax Credit
South Carolina’s Solar Energy Tax Credit is available until December 31, 2025. This state credit can be carried forward for up to 10 years if it exceeds the homeowner’s tax liability. This approach provides flexibility for those with varying tax situations.
Key Benefits:
- The credit covers 25% of the installation cost of solar energy equipment.
- It has a maximum of $3,500 per year or 50% of the taxpayer’s tax liability for that year, whichever is less.
- Unused credit can be carried forward for 10 years.
- For a $20,000 solar installation, this could result in a $5,000 tax credit over time.
Oregon: Solar + Storage Rebate Program
Oregon’s Solar + Storage Rebate Program is ongoing, subject to annual funding availability. The program offers rebates for solar installations and additional incentives for battery storage. Thus, Oregon enhances both energy security and sustainability for its residents.
Key Benefits:
- Up to $5,000 for solar electric systems and $2,500 for paired storage systems for residential customers.
- Low- and moderate-income households can receive up to $7,500 for solar and $3,750 for storage.
- Non-residential customers can get up to $30,000 for solar and $15,000 for storage.
- Rebates are available on a first-come, first-served basis until funds are depleted.
6. Maryland: Residential Clean Energy Rebate Program
Maryland’s Clean Energy Rebate Program operates continuously, subject to annual funding availability. Interestingly, the program offers a flat rebate amount regardless of the system size, simplifying the process for homeowners.
The flat rebate structure encourages all residents to consider solar installations. Knowing they will receive a predictable rebate to offset the initial costs is a simple yet powerful incentive.
Key Benefits:
- A flat $1,000 rebate for solar photovoltaic systems.
- An additional $500 rebate for solar water heating systems.
- Rebates are subject to available funds and are awarded on a first-come, first-served basis.
- There’s no cap on system size to qualify for the rebate.
Illinois: Adjustable Block Program
Illinois’ Adjustable Block Program will continue until the state meets its renewable energy goals. The program stands out by paying for Renewable Energy Credits (RECs) upfront, providing immediate financial benefits to homeowners.
Key Benefits:
- Upfront payment for 15 years of expected Renewable Energy Credit (REC) production.
- For small distributed generation systems (≤25 kW), the current rate is $68.89 per REC.
- A typical 6kW residential system generating about 7,000 kWh annually would produce about 7 RECs per year, potentially earning around $3,600 upfront.
- Rates adjust as blocks of capacity are filled, encouraging early adoption.
New Jersey: Successor Solar Incentive (SuSI) Program
New Jersey’s SuSI Program replaces the previous SREC program with a fixed incentive. SuSI Program is running until the state’s solar energy goals are met. This program provides a stable financial incentive per kilowatt-hour of solar energy generated, offering homeowners predictable and reliable support. The transition to a fixed incentive structure aims to streamline the process and make solar investments more attractive.
Key Benefits:
- For residential systems (up to 5MW), a fixed incentive of $90 per SREC-II (Solar Renewable Energy Certificate-II) for 15 years.
- A typical 7kW system generating 8,000 kWh annually would earn about 8 SREC-IIs per year, or $720 annually for 15 years.
- The program has a total capacity limit of 3,750 MW, with 750 MW allocated to residential and small net metered projects.
Connecticut: Residential Renewable Energy Solutions Program
Connecticut’s Renewable Energy Solutions Program is available until January 1, 2028. This program offers homeowners a choice between two incentive structures, allowing flexibility based on individual financial and energy goals. Whether opting for a performance-based incentive or a low-interest loan, Connecticut residents can tailor their solar investment to best meet their needs.
Key Benefits:
- Buy-All option:
- Fixed rate of $0.2943/kWh for 20 years for systems up to 10kW.
- For a 7kW system producing 8,000 kWh annually, this could mean about $2,354 per year.
- Netting option:
- Export rate of $0.1191/kWh for 20 years, plus avoided retail cost for self-consumed energy.
- Available until January 1, 2028.
Colorado: Xcel Energy Solar*Rewards Program
Colorado’s Xcel Energy Solar*Rewards Program is ongoing, with annual reviews by the utility. This utility-specific program offers performance-based incentives over 20 years, encouraging long-term investment in solar energy.
Key Benefits:
- Production-based incentives of $0.005/kWh for 20 years for small systems (0.5-25kW).
- For a 6kW system producing about 9,000 kWh annually, this amounts to $45 per year or $900 over 20 years.
- Medium systems (25-500kW) receive $0.0375/kWh for 20 years.
- The program is reviewed annually by the utility for continued offering and possible rate adjustments.
Recently Introduced Incentives For Home Solar In The USA
Hawaii: The Battery Bonus Program on Oahu and Maui offers cash incentives and bill credits for installing battery storage with new or existing solar systems. It aims to move Hawaii toward 100% clean energy by 2045.
Conclusion
By taking advantage of these programs, homeowners can significantly reduce their electricity bills, increase their property value, and contribute to a cleaner environment. Always check with state authorities or utility providers for the most current information and eligibility requirements.
