Solar and Solar-Plus-Storage Financial Incentives in 2023

Considering an investment in solar panels and battery storage might seem like a significant financial step. However, there's good news – various incentives are in place to greatly reduce, and sometimes even nearly eliminate, the initial costs of installing these systems. Additionally, you have the opportunity to earn money for the clean energy your setup generates.

Let's delve deeper into the array of incentives on offer, understand how they benefit homeowners, and explore the potential savings they can bring to your solar and battery storage system.

Federal Investment Tax Credit (ITC)

The federal Investment Tax Credit (ITC) stands out as one of the most beneficial incentives for homeowners embarking on the journey of solar and battery storage installation. This enticing opportunity is available to homeowners all across the nation and applies to solar panels, battery storage units, and even comprehensive solar-plus-storage systems.

Through the ITC program, homeowners have the potential to deduct a substantial 30% of the overall cost of their solar and/or battery systems from their federal taxes. What's noteworthy is that this incentive comes without an income limit or a value cap, making it particularly advantageous. In the past, the ITC required batteries to be combined with solar setups to qualify. However, a significant change has come into play starting from January 2023 – the ITC now extends to standalone batteries with a capacity of 3 kilowatt-hours or more.

Suppose your tax liability isn't substantial enough to fully utilize the ITC amount within a single year. In that case, there's a valuable provision – any remaining credit can be carried over to subsequent years as long as the ITC remains valid. Worth noting is that the ITC will experience a reduction from the current 30% to 26% starting in the year 2033. This emphasizes the importance of seizing the current advantageous rate while planning your solar and battery journey.

There are specific state-level initiatives that provide tax credits similar to the federal ITC, tailored to your state tax liability. These state tax credits can be utilized in addition to the federal ITC, maximizing your potential savings when you invest in a solar and/or battery system.

The Database of State Incentives for Renewables & Efficiency (DSIRE) serves as an excellent resource to kick-start your search for state-specific tax credits. Here's a glimpse of state tax credit plans:

Arizona: The Residential Arizona Solar Tax Credit initiative allows homeowners to recoup 25% of their solar panel expenses from personal income tax, providing a potential maximum benefit of up to $1,000.

Maryland: Residents of Maryland can benefit from a tax credit of up to 30% of their energy storage system's cost, applicable as a credit toward state income taxes. This credit is capped at a maximum of $5,000.

Massachusetts: Homeowners in Massachusetts stand to gain a 15% credit for their solar installations, with the credit amount capped at a maximum of $1,000.

New Mexico: The state of New Mexico extends a 10% credit to taxpayers, offsetting the cost of solar installations, with a cap that can potentially reach a generous $6,000.

California: The Golden State offers various incentives, and California's Self Generation Incentive Program (SGIP) is a standout. It provides dollar-per-kilowatt rebates to homeowners installing solar batteries, aligning with California's strong commitment to renewable energy adoption.

Rebates

Beyond tax credits, homeowners can explore an array of rebates offered by local governments, utilities, and even solar companies as a means of incentivizing the adoption of solar panels and batteries. Unlike tax credits that provide reductions in tax liability, rebates are typically upfront payments provided either directly to homeowners or to installers, who then lower their installation charges.

Rebates are commonly calculated based on the size of your solar system, adding to their locality-based nature. Your eligibility for these rebates hinges on your geographical location. Trustworthy local installers possess a deep understanding of available incentives, while the Database of State Incentives for Renewables & Efficiency (DSIRE) can assist in gauging your eligibility.

Certain utility companies introduce innovative incentive programs that encourage customers to integrate solar batteries, thereby contributing to grid energy storage solutions. For instance, "bring your own battery" initiatives permit utilities to utilize your battery during specific periods.

Let's explore some illustrative examples of state rebate plans:

California: The Self Generation Incentive Program (SGIP) offers homeowners an appealing opportunity to embrace the future of sustainable energy. Designed to empower individuals in their quest for cleaner power alternatives, this initiative stands as a testament to the state's unwavering dedication to environmental responsibility.

Through the SGIP, homeowners are eligible for dollar-per-kilowatt rebates, providing a tangible reward for those who choose to integrate solar batteries into their energy portfolio. This forward-thinking approach not only supports homeowners in reducing their reliance on conventional energy sources but also contributes to the state's ambitious renewable energy targets.

By participating in the SGIP, homeowners not only reap the benefits of financial incentives but also become active contributors to California's broader vision of a greener, more sustainable future. This program showcases the state's commitment to empowering individuals to make environmentally conscious choices while building a robust foundation for the widespread adoption of renewable energy technologies.

Colorado: Despite the absence of a comprehensive statewide rebate program, the state ensures that homeowners have access to a range of incentives through local utilities and organizations. In the vibrant landscape of Colorado's solar incentives, EnergySmart Colorado shines as a prominent example.

EnergySmart Colorado's commitment to fostering sustainable energy practices is evident through its rebate offerings, which span from $400 to $2,500, dependent on your geographical location. This localized approach acknowledges the diverse needs and opportunities across the state, providing homeowners with the means to embrace solar energy and its numerous benefits.

The collaboration between Colorado's residents and organizations like EnergySmart Colorado exemplifies the state's dedication to making solar solutions accessible and advantageous for all. This dynamic approach empowers homeowners to contribute to Colorado's clean energy ambitions while enjoying the immediate and long-term advantages of adopting solar technology.

Maryland: Aiming to propel renewable energy adoption within its borders, Maryland introduces homeowners to the enticing prospect of the Residential Clean Energy Rebate program. This initiative stands as a testament to the state's commitment to both sustainable practices and the financial well-being of its residents.

Through the Residential Clean Energy Rebate program, Maryland residents are bestowed with the opportunity to secure a generous rebate amounting to $1,000 upon the successful installation of a new solar panel system. This initiative not only translates into direct monetary savings but also symbolizes a collective stride towards a cleaner and more eco-conscious future.

By embracing the Residential Clean Energy Rebate program, Maryland residents not only take a proactive step towards harnessing the power of solar energy but also align themselves with the state's progressive efforts in the realm of renewable energy. This incentive acts as a tangible manifestation of Maryland's commitment to sustainability and signifies the state's investment in the prosperity of both its residents and the environment.

Massachusetts: Illuminating the path toward a greener future, the state of Massachusetts introduces the Solar Massachusetts Renewable Target (SMART) program, an ambitious initiative designed to amplify the rewards of solar energy adoption. This program extends its embrace to customers of prominent energy providers like Eversource, National Grid, and utilities, magnifying the allure of solar power with its multifaceted incentives.

Under the canopy of the SMART program, participants are not only compensated for the electricity generated by their solar panels but are also recipients of supplementary payments for each kilowatt-hour produced. This innovative framework not only positions solar energy as a pivotal contributor to the state's energy landscape but also serves as an incentive for homeowners to embark on their solar journey with renewed enthusiasm.

Furthermore, the SMART program's forward-thinking approach doesn't merely stop at solar panels. It extends its benevolent arm to include additional incentives for homeowners who choose to integrate battery storage into their solar systems. By weaving together solar panels and battery storage, participants can maximize their rewards, thereby paving the way for a more resilient and efficient energy ecosystem.

Through the SMART program, Massachusetts residents find themselves at the intersection of financial gain and environmental responsibility. By embracing solar energy and its versatile applications, participants not only stand to benefit personally but also contribute to the broader goal of a more sustainable future for generations to come.

New York: Illuminating the path towards sustainable energy, the state of New York introduces the NY-Sun Megawatt Block program, a visionary initiative designed to empower homeowners on their journey to harnessing the sun's abundant energy. This program offers a streamlined and accessible pathway for residents to unlock the financial advantages of solar energy adoption.

Under the aegis of the NY-Sun Megawatt Block program, homeowners are granted the opportunity to claim dollar-per-watt rebates for the installation of their solar energy systems. This strategic framework not only incentivizes homeowners to embrace solar power but also fosters a more resilient and eco-conscious energy landscape across the state.

By aligning with the NY-Sun Megawatt Block program, participants are not only taking a proactive step towards reducing their carbon footprint but are also positioning themselves to reap financial rewards in the form of rebates. This integrated approach not only underscores the state's commitment to clean energy but also empowers homeowners to be active participants in the transition to a more sustainable future.

The NY-Sun Megawatt Block program's impact transcends individual households, extending its influence to shape the trajectory of New York's energy consumption and environmental legacy. By embarking on the solar journey facilitated by this innovative initiative, participants contribute to a collective effort aimed at driving positive change, financial savings, and a greener tomorrow.

These multifaceted rebate programs across different states underscore the concerted efforts to make solar and battery installations accessible, cost-effective, and environmentally friendly, motivating homeowners to embark on their clean energy journey.

Net Metering

The electricity output of your solar panels varies with the seasons and time of day. If you lack a battery to store excess electricity generated during peak production times, you could potentially miss out on utilizing your panels to the fullest. This is where the concept of net metering steps in.

Net metering offers you the opportunity to contribute any surplus power generated by your panels back to the grid. In return, you receive credits on your energy bill. These credits can be used when your solar panels are not generating enough electricity to meet your immediate needs, allowing you to offset your consumption costs. This widely adopted incentive is available in many states.

For insights into whether your state offers net metering and how it functions, you can consult the Database of State Incentives for Renewables & Efficiency (DSIRE). This resource can guide you in understanding the specifics of net metering in your region and how you can make the most of this advantageous program.

Property Tax Exemptions

Solar panels can be like a shining investment for your property. Did you know that homes with solar panels can sell for around 4.1% more than homes without them? That's what research from Zillow tells us. And here's something even brighter – some places offer a special deal on property taxes if you have solar panels. This means that if your solar panels make your home more valuable, you won't have to pay extra taxes on that added value. It's like a little bonus for going solar!

Imagine this: your home's value goes up, but your taxes stay the same. This tax break for solar panels is pretty cool, and you can find it in about 36 different states. It's like a way to reward you for choosing solar energy. So, not only do you get to save money on your energy bills, but your home also gets an extra shine in terms of value. It's a win-win situation for you and the environment!

Sales Tax Exemptions

In 25 states, there's a smart way to cut down the initial expenses of getting solar panels and all the gear you need. It's called a sales tax exemption. What this means is that you might not have to pay sales tax on the solar stuff you're buying. It's like a little break for your wallet.

Let's look at Minnesota as an example. If you're there, you're in luck! When you buy solar goodies, you can keep almost 7% of your money because you don't have to pay sales tax. That's a nice chunk of change you get to hold onto. So, not only do solar panels help you save on energy bills, but they also come with this sweet perk to make them even more affordable upfront. It's like a friendly wave from your state saying, "Hey, thanks for going solar!"

Solar Renewable Energy Certificates (SREC)

Renewable energy can be a financial asset too, thanks to Solar Renewable Energy Certificates (SRECs). Think of SRECs as a way to cash in on your solar power, similar to trading stocks. Here's how it works: for every 1,000 kilowatt-hours of electricity your solar system produces, you'll earn a valuable SREC that you can sell to your utility company. The value of SRECs can fluctuate based on demand, sometimes soaring as high as $300 per SREC, offering a potentially lucrative opportunity.

Now, let's bring this down to your home's level. An average solar installation generates about 720 to 900 kilowatt-hours of energy per month with a system size of around 6 kilowatts. That translates to earning around 8 to 10 SRECs annually, which could potentially mean putting at least $2,400 back in your pocket. Exciting, right?

States like New Jersey, Illinois, Pennsylvania, Maryland, Ohio, and Virginia are waving the SREC flag, offering residents this enticing financial benefit to embrace solar power and contribute to cleaner energy futures. So, not only does your solar system give you power independence, but it can also bring you unexpected financial gains through SRECs.

Low-Interest Loans

Beyond monetary rewards, certain states extend a helping hand through low-interest loans for homeowners looking to adopt solar and batteries. Take Michigan, for instance, where homeowners can secure loans for energy-efficient enhancements encompassing solar panel setups and batteries.

Now, to harness these incentives, having complete ownership of your solar and storage system is key. Partnering with a dependable installer in your locality guarantees that you don't overlook any potential financial advantages. A trustworthy installer will usually incorporate these incentives into their initial estimate or proposal, giving you a clear view of the savings upfront before you commit. This proactive approach ensures you're well-informed and can make an informed choice.

At Forme Solar, our commitment is to provide you with top-tier solar solutions, ensuring flawless installations and maximizing your access to available incentives. We take pride in delivering superior-quality solar products that align with your needs. Don't miss out on the potential benefits that solar and storage incentives can offer. Reach out to us today to find a dedicated installer in your vicinity who can guide you through this transformative journey. Your path to a more sustainable and rewarding energy future starts here.