Solar Tax Credits & Incentives by State (2026) | PES Supply
Solar Tax Credits & Incentives by State (2026)
Complete guide to federal and state solar incentives, rebates, and tax credits
Federal Solar Investment Tax Credit (ITC)
30% of total system cost (equipment + installation)
Available through 2032. Drops to 26% in 2033, 22% in 2034. Expires 2035.
Eligibility: Must own (not lease) the system. Must have sufficient tax liability.
State Solar Incentives by State
| State | State Tax Credit | Rebate | Net Metering | SREC |
|---|---|---|---|---|
| Texas | None | Utility rebate ($0.50-$2.00/W) | Yes (varies) | No |
| California | None (expired) | SGIP battery rebate ($0.15-$0.25/Wh) | NEM 3.0 (reduced) | No |
| Florida | None | Property tax exemption | Yes (full retail) | No |
| Arizona | None (expired) | Utility rebate ($0.10-$0.75/W) | Yes (net billing) | No |
| New York | 25% (max $5,000) | NYSERDA rebate ($0.30-$0.60/W) | Yes (full retail) | No |
| Massachusetts | 15% (max $1,000) | SMART program | Yes (net metering) | SREC-II |
| New Jersey | None (expired) | Successor SREC program | Yes (full retail) | SREC-II |
| Colorado | None | Utility rebate (varies) | Yes (full retail) | No |
| Nevada | None | Utility rebate | Yes (net billing) | No |
| Illinois | None | Illinois Shines (SREC) | Yes (full retail) | AREC |
Property Tax Exemptions
Solar increases home value, but many states exempt the added value from property taxes:
- Texas: 100% property tax exemption on solar value
- California: Active Solar Energy System Exclusion
- Florida: 100% exemption for residential
- Arizona: 100% exemption (20 years)
- New York: 15-year exemption
- New Jersey: 100% exemption
Sales Tax Exemptions
| State | Sales Tax | Solar Exemption |
|---|---|---|
| Texas | 6.25% | 100% exempt |
| Florida | 6% | 100% exempt |
| Arizona | 5.6% | 100% exempt |
| New Jersey | 6.625% | 100% exempt |
| New York | 4% | 100% exempt (local varies) |
| California | 7.25% | Not exempt (except SGIP) |
Example Savings: Texas
10 kW system at $3.00/W = $30,000
Federal ITC (30%): -$9,000
CPS Energy rebate ($1.00/W): -$10,000
Sales tax exemption: -$1,875
Property tax exemption: $0 added to property taxes
Net cost: ~$9,125 (70% savings)