State Solar Incentives: Ranking the Best to Worst

Investing in solar for your home is a big step. While the upfront costs may look scary, however, solar panels pay off in less than a decade. Plus, many states have incentives that provide discounts or tax breaks for people who install solar to encourage more homeowners to think about the environment. Some of these states make getting solar a cakewalk, whereas others practically discourage the solar movement. For shame.

What Are the Best States?

Without further ado, the Solar Energy Industries Association (SEIA)‘s top picks for state solar incentives are…

  1. California.
  2. Arizona.
  3. North Carolina.
  4. New Jersey.
  5. Nevada.
  6. Massachusetts.
  7. New York.
  8. Hawaii.
  9. Colorado.
  10. Texas.

These states, some of which have close to or more than 100 incentive programs, installed more than 100 megawatts worth of solar capacity by the end of 2015. California? 3,266 MW. State incentives be worth it. Many of the best states allow solar leasing, have a comprehensive renewable power plan and permit residents to recoup their solar investment within a decade.

Success in the Rockies

Colorado, with its 300 days of sunshine, is a perfect example of a state with powerful solar incentives. Solar prices have decreased more than 10 percent in the last year, and 66 percent from 2010. According to The Denver Post, the number of solar installations has been growing. The Centennial State more than doubled its residential installations between 2012 and 2014.

Examples of state solar incentives include solar power rebates, solar power tax credits, property/sales tax exemptions and performance payments.

Solar incentives and rebates aren’t just for homeowners, either. Business owners can lead the way and apply for solar incentives as well, including tax deductions for companies that invest in solar energy, tax exemptions for solar energy and loans for solar-related projects.

What Are the Worst?

No offense, bottom five, but you’ve got some catching up to do. The worst states for solar power incentives, as calculated by the Database of State Incentives for Renewables and Efficiency, are:

  • West Virginia.
  • Kansas.
  • Alaska.
  • North Dakota.
  • Nebraska.

Many of these offenders also don’t allow solar leasing, which is an extremely popular option for those who aren’t keen on paying the whole amount up front or don’t need full ownership. Solar leasing, like other types of leases, allows you to rent solar panels instead of purchasing them outright for limited use — seasonally, for example.

You can check to see what incentives you qualify for based on your zip code through the Database of State Incentives for Renewables and Efficiency. The database compiles all local, state and federal incentives so you can gauge which ones you’re eligible for.

The difference between states with good incentives and those without are also determined by regulation. Many of these low-scoring states, such as Arkansas and Idaho, don’t have renewable energy mandates that businesses must follow and have zero solar rebates available to consumers.

The Solar Investment Tax Credit

What can you do if you live in a state with poor solar incentives? You can contact your local and state legislatures to let them know how solar energy could benefit you financially. Explore renewable and energy-efficiency programs your local utility company offers and apply for one.

Better yet? Forget the state. Get to know the Solar Investment Tax Credit (ITC) and see if you qualify for this federal incentive. For those who own property powered in part by solar, this 30-percent credit is a dollar-to-dollar reduction in the income taxes the U.S. government normally claims from you. At the risk of sounding like an infomercial, act now! The ITC drops to 26 percent in 2020.

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