Although the initial cost of solar panels can be intimidating, there are several steps you can take to help reduce the overall cost as well as increase the amount of money your solar panels save you in the long run.
In general, we recommend taking advantage of federal, state, and local incentives as well as purchasing more efficient solar panels to save money.
Use the federal solar tax credit
The federal Solar Investment Tax Credit (ITC) is a tax incentive worth 30% of the total cost of your solar panel system. All U.S. homeowners who install solar panels are eligible for this credit, and it reduces what you owe in federal income taxes. For most solar systems, this credit is worth several thousand dollars, which represents a significant savings.
However, if you choose to rent your plates, you will not qualify for this tax credit. You can only claim this tax credit if you own your plates.
The credit is currently scheduled to fall to 26% in 2033, then to 22% in 2034, before ending completely in 2035.
Look at state incentives for solar energy
In addition to federal incentives, many states offer other incentives for solar use, including tax breaks, credits and rebates. If you’re interested in solar incentives available in your state, you can browse the State Incentives for Renewables and Efficiency (DSIRE) database or visit your local government’s website to learn more.
Additionally, net metering is a program that allows you to sell excess electricity generated by your solar panels to your utility company for bill credits. Forty-one states and Washington, D.C., have a state-mandated net metering policy, although some policies are better than others. States that do not have a mandatory net metering policy, such as Texas and Idaho, may have utility companies offering the program.
Many states also offer solar rebate programs for low- and moderate-income households or community solar programs aimed at making clean energy more accessible.
