How to find and claim solar panel rebates
Solar rebates help reduce the cost of solar panels, and are available to homeowners in many parts of the country. They’re usually available as “cash back” or a direct discount when you buy solar panels for your home.
These rebates make solar power more affordable and reduce solar panel payback time.
On this page:
- How solar rebates work
- Are they taxable income?
- Solar rebates by state
- Manufacturer solar rebates
- Battery storage rebates
How do solar rebates work?
Solar rebates are usually a dollar-for-dollar reduction in the cost to install a solar energy system. Many solar rebates are paid directly to installers, who pass the savings on to homeowners at the time of installation. Others are paid to solar system owners after installation, either as a lump sum or over time.
Solar rebates can be offered by utility companies, state governments, or the solar panel manufacturers themselves. It can be hard to figure out how to find them and whether you’re eligible, so we made this page to guide you to rebates in your state.
Are solar rebates taxable income?
As a general rule, solar panel rebates and subsidies paid directly to taxpayers for the purchase of a residential solar panel system are not considered taxable income, according to Section 136 of U.S. Code 26.
However, that doesn’t mean solar rebates aren’t counted for tax purposes. You have to reduce the total cost you paid for the solar installation by the amount of the rebate when calculating the federal investment tax credit (ITC) and any state solar tax credits for which you qualify.
Solar incentives that are taxable
The IRS’s take on solar rebates differs from their stance on Solar Renewable Energy Credits (SRECs), according to an IRS letter which was submitted in response to a solar-owning taxpayer question in 2010.
Because SRECs are paid based on the kilowatt hours (kWh) generated by a solar photovoltaic (PV) system, the income from selling SRECs is considered taxable gross income.
Solar rebates by state
Here is a list of states that have solar rebate programs:
Where do we get this information?
Information about currently-available solar rebates is sourced from utility company websites and the Database of State Incentives for Renewable Energy (DSIRE).
Manufacturer solar rebates
Some solar panel manufacturers offer rebates, either through installers or directly to consumers who sign up for special online deals. These rebates are usually limited-time offers tied to the launch of a new product.
Rebates are more common on the best panels a manufacturer offers, rather than older or less expensive models.
The smartest way to look for solar rebates is to first get multiple quotes from solar installers, then search for the manufacturer names. Manufacturer rebates don’t last long, so it’s best to also check things like solar company social media channels.
Brands like LG and SunPower offer rebates of $600-$1,000 at various times.
Rebates for battery storage systems
A final kind of rebate that is available to home solar customers is for home batteries. Battery incentives are still fairly new, but can be found in a few places. Battery installations also qualify for the federal tax credit as long as the batteries will be charged exclusively with solar power.
The most well-known battery rebates come from California's Self Generation Incentive Program (SGIP). The SGIP program can help greatly reduce the installation costs of adding a home battery in California.
Other places around the country offer battery incentives, as well.
- In Arizona, customers of Salt River Project can get battery storage rebates of up to $3,600.
- The Connected Solutions battery program from National Grid is available to customers in Connecticut, Massachusetts, and Rhode Island.
- Jacksonville Electric Authority in Jacksonville, Florida offers a solar battery incentive of $4,000 per qualified home or business battery system.
- Maryland offers a tax credit equal to 30 percent of the cost of installing the battery, up to a maximum of $5,000 for homeowners and $75,000 for commercial property owners.
- Massachusetts offers a bonus incentive for batteries under its SMART solar program.
- Finally, Nevada’s NV Energy offers up to $3,000 for installing energy storage, with higher payout for time-of-use rate customers.
Author: Ben Zientara | Solar Policy Analyst and Researcher
Ben is a writer, researcher, and data analysis expert who has worked for clients in the sustainability, public administration, and clean energy sectors.