Solar Tax Credits & Incentives by State (2026) | PES Supply
Solar Tax Credits & Incentives by State (2026)
Complete guide to federal, state, and local solar incentives, rebates, and tax credits
Federal Solar Tax Credit (ITC)
The federal Investment Tax Credit (ITC) provides a 30% tax credit on the total cost of solar panel installation, including equipment, labor, and permitting. This credit is available through 2032.
| Year | ITC Rate | Example Savings ($25K System) |
|---|---|---|
| 2024-2032 | 30% | $7,500 |
| 2033 | 26% | $6,500 |
| 2034 | 22% | $5,500 |
State Solar Incentives
| State | State Tax Credit | Rebate | Net Metering | Property Tax Exempt |
|---|---|---|---|---|
| California | None (ended) | SGIP Battery Rebate | NEM 3.0 (reduced) | Yes |
| Texas | None | Utility rebates vary | Varies by utility | Yes |
| Florida | None | None statewide | Full retail (net) | Yes |
| New York | 25% (max $5,000) | NY-Sun MW Block | Full retail | Yes |
| Arizona | None (ended 2016) | Utility rebates vary | Full retail | Yes |
| Massachusetts | 15% (max $1,000) | SMART Program | Full retail | Yes |
| New Jersey | None | SREC-II | Full retail | Yes |
| Colorado | None | Utility rebates | Full retail | Varies |
| Illinois | None | Illinois Shines (SREC) | Full retail | Yes |
| Nevada | None | None | Full retail | Yes |
Additional Solar Incentives
- Federal Residential Clean Energy Credit: 30% of solar + battery storage cost (batteries must be charged by solar)
- USDA Rural Energy for America (REAP): Up to 50% grant for agricultural solar installations
- Solar Renewable Energy Credits (SRECs): Sell credits for each MWh produced (NJ, MA, IL, DC, MD, OH, PA)
- Property Tax Exemption: Most states exempt solar from property tax assessments
- Sales Tax Exemption: Many states exempt solar equipment from sales tax
- Utility Rebates: Check with local utility for installation rebates ($500-$5,000)
How to Claim the Federal Solar Tax Credit
- Install a qualifying solar energy system (panels, inverter, mounting, labor)
- Keep all receipts and the system's total cost
- File IRS Form 5695 with your tax return
- Apply the 30% credit against your federal tax liability
- Unused credit rolls forward to future tax years