State Tax Credits and Rebates Available for Solar Energy
While converting solar energy of the sun into electricity is pollution-free, reliable and virtually maintenance-free technology - it is also significantly expensive compared to traditional power generation methods. For this reason, in order to help bring renewable energy to communities and help the country turn toward more green living sources, each state offers a variety of substantial tax incentives programs to support and encourage energy customers to install PV generating systems.
Each state offers varying rebates and incentives - this article will outline those for all fifty U.S. States. Choose your state to review the rebates and incentives available to you. For more information or to apply for any of the programs, contact your state government.
Tax Credit Chart
| State | Residential Tax Credit | Property Tax Exemption | Other Rebate Programs | Other Incentives |
|---|---|---|---|---|
| Alaska | 30% of expenditures w/ no max amount | No | Yes | Energy Efficient Mortgages (EEM) and buy back programs. |
| Alabama | 30% of expenditures w/ no max amount | No | Yes | EEM (Energy Efficient Mortgages) available. |
| Arizona | 25% tax credit up to $1,000 | 100% of increased value | Depends on Utility Company | There are 6 utility companies in AZ - need to check your local provider for more details. |
| Arkansas | 30% of expenditures w/ no max amount | No | No | EEM's are available. |
| California | 30% of expenditures w/ no max amount | No | Yes | Performance initiatives, partnerships, feed-in tariff, and EEM's are available. |
| Colorado | 30% of expenditures w/ no max amount | No | Yes | Exempts 100% of all renewable energy equipment form sales and use tax. |
| Connecticut | 30% of expenditures w/ no max amount | 100% property tax exemptions are available for renewable energy systems. | Yes | Sales and use tax exemptions, loans, and EEM's are available. |
| Delaware | 30% of expenditures w/ no max amount | No | No | EEM's are available. |
| District of Columbia | 30% of expenditures w/ no max amount | No | No | Incentives and EEM 's are available. |
| Florida | 30% of expenditures w/ no max amount | 100% of the total cost of the renewable energy system or device including installation is entitled to an exemption. | Yes - varies by utility company | EEM's available and Conservation Subsity Exclusions |
| Georgia | Tax credit equal to 35% of expenditures up to $10,500 for PV | No | Yes | EEM's and Solar Buy Back Program. |
| Hawaii | 35% tax credit of expenditures | No | Yes | Solar roof initiative loan programs |
| Idaho | Income tax deduction of 40% total cost first year - 20% next 3 yrs. | No | No | Sales tax refund, EEM's, low interest loans. |
| Illinois | 30% of expenditures w/ no max amount | No | Yes | EEM's are available. |
| Indiana | 30% of expenditures w/ no max amount | 100% property tax exemptions are available for renewable energy systems. | Yes | EEM's are available. |
| Iowa | 30% of expenditures w/ no max amount | 100% of added value to property | Yes | Sales Tax exemption, and Excise Tax Incentive |
| Kansas | 30% of expenditures w/ no max amount | 100% property tax exemptions are available for renewable energy systems. | No | EEM's are available. |
| Kentucky | 30% of expenditures w/ no max amount | No | No | EEM's available, low interst loans |
| Louisiana | Credit is equal to 50% of first $25K | 100% on solar equipment | No | EEM's and loans available |
| Maine | 30% of expenditures w/ no max amount | No | Yes | EEM's and loans available |
| Maryland | 20-25% credit incremental cost credit | 100% on solar energy devices | No | EEM's available, sales and use tax exemptions |
| Massachusetts | 15% credit up to $1,000 | Yes | Yes | EEM's available |
| Michigan | 30% of expenditures w/ no max amount | No | Yes | EEM's available |
| Minnesota | 30% of expenditures w/ no max amount | Added value to property is exempt from real property tax. | Yes | EEM's available, loan programs, solar energy buy back program. |
| Mississippi | 30% of expenditures w/ no max amount | No | Yes | EEM's available |
| Missouri | 30% of expenditures w/ no max amount | No | Yes | EEM's available |
| Montana | 100% tax credit up to $500 | An exemption up to $20K in value | No | EEM's and loan programs available. |
| Nebraska | 30% of expenditures w/ no max amount | No | No | EEM's and loan programs available. |
| Nevada | 30% of expenditures w/ no max amount | 100% value of qualified renewable energy system will be subtracted from appraised value of a home for property tax purposes. | Yes | EEM's and property tax abatement for green buildings. |
| New Hampshire | 30% of expenditures w/ no max amount | Assessed value of the system. | Yes | EEM's available. |
| New Jersey | 30% of expenditures w/ no max amount | Value added to property is exempt. | Yes | EEM's, sales tax exemption, and loan programs. |
| New Mexico | 10% personal income tax credit up to $9,000 | No | No | Buy back programs, and EEM's available. |
| New York | 25% personal income tax credit up to $5,000 | Yes - depends on system installed and locations. | Yes | Sales tax exemption, loan programs, and EEM's. |
| North Carolina | 35% tax credit up to $10,500 | Yes | Yes | Production incentives, loan programs, and EEM's available. |
| North Dakota | 3% tax credit for 5 years | Geothermal, solar or wind energy device is 100% exempt from local property taxes. | No | EEM's available. |
| Ohio | 30% of expenditures w/ no max amount | No | Yes | EEM's and property tax abatement for green buildings. |
| Oklahoma | 30% of expenditures w/ no max amount | No | Yes | EEM's available. |
| Oregon | 50% tax credit up to $6,000 | 100% property tax exemption on renewable energy systems. | Yes | Production incentives, EEM's, and buy back programs. |
| Pennsylvania | 15% tax credit up to $1M | No | Yes | Production incentives and EEM's. |
| Rhode Island | 25% tax credit up to $15K | Renewable energy systems are exempt from property taxes. | Yes | EEM's and buy back programs. |
| South Carolina | 25% tax credit up to $3,000 | No | Yes | Conservation subsidies and EEM's available. |
| South Dakota | 30% of expenditures w/ no max amount | 100% of the total cost including installation of the system and equipment. | Yes | Conservation subsidies and EEM's available. |
| Tennessee | 30% of expenditures w/ no max amount | No | Yes | Conservation subsidies and EEM's available. |
| Texas | 30% of expenditures w/ no max amount | The appraised property value that arises from the installation of a solar or wind-powered energy system is allowed to be tax exempted. | Yes | Buy back programs and EEM's available. |
| Utah | 25% tax credit up to $2,000 | No | Yes | EEM's and incentive programs. |
| Vermont | 30% of expenditures w/ no max amount | Total value added by a renewable energy system may be exempt from property taxes. | Yes | Sales tax exemption, loan and incentive programs, EEM's. |
| Virginia | 30% of expenditures w/ no max amount | Solar energy equipment or recycling equipment is allowed to be exempt or partially exempt from local property taxes depending upon the city or county you live in. | No | Green building incentives, entive programs, EEM's. |
| Washington | 30% of expenditures w/ no max amount | No | Yes | Sales and use tax exemptions, buy back program and EEM's available. |
| West Virginia | 30% tax credit up to $2,000 | No | No | EEM's available. |
| Wisconsin | No | No | No | Buy back programs, tariffs, and grant programs available. |
| Wyoming | 30% of expenditures w/ no max amount | No | No | Incentive programs, loans, and EEM's available. |
Federal Tax Credits
In addition to state tax credit and rebate offers, there are also federal tax credits. These include both personal and corporate exemptions, corporate depreciation, corporate deduction, corporate tax credits, and a personal tax credit.
In October 2008, President Bush signed H.R. 1424, the Emergency Economic Stabilization Act of 2008, into law. In the bill are a number of provisions supporting energy efficiency and renewable energy. This package includes an 8-year extension of the commercial and residential solar investment tax credit, completely eliminates the monetary cap for residential solar electric installations, and allows utilities and alternative minimum tax (AMT) filers to take the credit. The Investment Tax Credit (ITC) is effective now. However, the lifting of the residential cap for solar electric property is effective after December 31, 2008. Residential solar water heating systems are subject to the $2,000 cap.
A summary of the highlights of the solar investment tax credit (ITC) provisions are as follows:
- Extend for 8 years the 30-percent tax credit for both residential and commercial solar installations.
- Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008).
- Eliminate the prohibition on utilities from benefiting from the credit.
- Allow Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit.
- Authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar.
If you are looking to invest into using solar, the U.S. Department of Energy's website (www.eere.energy.gov) has an entire section devoted to the many ways you can use solar energy in your home and tools to calculate your energy costs.