Solar Tax Credit
The ITC allows you to deduct 26% of the cost of installing a solar energy system from your federal taxes. The (investment tax credit) applies to both residential and commercial systems, and there is no cap on its value.
2022: Owners of new residential and commercial solar can deduct 26% of the cost of the system from their taxes.
2023: Owners of new residential and commercial solar can deduct 22% of the cost of the system from their taxes.
2024 onwards: Owners of new commercial/utility solar energy systems can deduct 10% of the cost of the system from their taxes. There is no federal credit for residential solar energy systems.
Solar State Tax Credit
Some states offer additional tax credits for installing a solar panel system. With a state solar tax credit, you can deduct a portion of the cost of your solar panel system from your state tax bill, similar to the federal ITC. These amounts vary significantly by state.
Performance Based Incentives
Some states or utilities offer (PBIs), which pay solar energy system owners a per kilowatt-hour credit for the electricity that their systems produce. Certain PBI programs require that you install equipment manufactured in your state to qualify. Unlike SRECs, PBIs don’t have to be sold through a market, and incentive rates are determined when the system is installed. PBIs may replace or exist alongside net metering policies.
Solar Renewable Energy Credits
Legislation in some states requires utilities to generate a certain percentage of their electricity from solar power. If you live in one of these states, your system will generate (SRECs) for the amount of electricity produced by your solar panel systems. Utilities will buy your SRECs so that they can count your solar power towards meeting their requirements. Selling your SRECs can result in hundreds (or even thousands) of dollars more per year in income, depending on the SREC market in your state.
USDA REAP Grant
The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements.
agricultural producers with at least 50% of their gross income coming from agricultural operations
small businesses in eligible rural areas
loan guarantees on loans up to 75% of total eligible project costs
grants for up to 25% of total eligible project costs
combined grant and loan guarantee funding up to 75% of total eligible project costs