Solar incentives vary by state and can reduce your installation costs by 25% to 60% depending on where you live. With the federal solar tax credit no longer available directly to homeowners in 2026, state and local incentives have become the primary way to lower solar costs.
Key solar incentives available in 2026 include:
States with the strongest solar incentive packages include New Jersey (SuSI program worth $10,200+ over 15 years), New York (25% state tax credit plus 15-year property tax exemption), Illinois (SREC program worth $10,000-$12,000 over 15 years), and Maryland (up to $7,500 for income-qualified residents plus SRECs). Other states like Hawaii and Nevada also offer compelling programs worth exploring.
Starting in 2026, homeowners must choose between purchasing solar outright to claim local incentives or entering Third-Party Ownership arrangements like leases and PPAs to benefit from the federal tax credit indirectly.
Acting fast pays off when it comes to solar incentives. The value of most programs decreases over time as solar adoption grows and equipment costs continue to drop.
Below you'll find local solar incentives organized by state.
Arizona
California
Colorado
Connecticut
Florida
Illinois
Maryland
Massachusetts
Minnesota
New York
New Jersey
Ohio
Texas
Virginia
In Arizona (often called the "Sunshine State"), solar panels make perfect sense for homeowners wanting to convert sunlight into savings. Even better, Arizona provides several incentives that boost your energy cost savings. Homeowners considering going solar with SRP in Arizona can take advantage of multiple programs.
Keep in mind that efforts are underway to weaken Arizona's net billing policy. However, Arizonans can lock in the current policy by installing solar before any changes take effect.
High energy costs and plenty of sunshine make California an excellent state for solar. In fact, California offers relatively few solar incentives because solar already costs far less than purchasing electricity from a utility. For a comprehensive breakdown, see our California solar incentives and rebates guide.
Still, here are some California solar incentives worth knowing about.
Colorado enacted a clean energy bill in 2023 that includes funding to streamline permitting for local solar energy projects. This complements existing state and local solar incentives. Understanding whether solar permits are necessary helps homeowners navigate the installation process.
These Colorado utilities also provide some form of rebate or rewards program:
Connecticut has the second-highest average electricity price in the US, making solar panels a powerful tool for massive energy cost savings. That said, Connecticut doesn't overflow with solar incentives, but every bit helps.
The Residential Energy Solutions program took over from net metering in 2022, giving solar owners two compensation options.
The "netting option" works similarly to traditional net metering programs but adds direct payments for each kilowatt-hour of solar generation. The "buy-all option" lets you sell all your solar production to your utility for on-bill credit compensation at a flat rate per kWh.
As of this writing, these appear to be Connecticut's only solar incentives, though checking with your local government and utility provider is worthwhile.
Abundant sunshine and a thriving rooftop solar industry make Florida perfect for going solar. A handful of state and local incentives sweeten the deal. For FPL customers, our FPL solar guide covers everything you need to know about costs and installation.
Illinois demonstrates how solar incentives can make solar appealing in states without exceptionally high electricity prices or constant sunshine. The launch of the Adjustable Block Program in 2019 boosted solar's financial benefits and sparked residential, utility, and community adoption.
Note on the Illinois Shines Program:
Based on 2025 SREC values, an average residential solar system would generate between $10,000 and $12,000 over 15 years.
Maryland provides several solar and battery incentives that can significantly cut the cost of these home upgrades while maximizing energy cost savings.
SREC values fluctuate over time, but at current rates, an average system producing 7,000 kWh annually would generate over $350 per year.
Beyond the state property tax exemption, several counties offer local property tax credits worth up to $5,000 annually. These include:
Consult a licensed tax advisor to create a strategy for claiming these local incentives.
Massachusetts solar incentives feature a state tax credit and rebate program, plus generous municipal rebate programs. Homeowners should take advantage of these incentives now, as program funding typically decreases over time.
Massachusetts also features numerous municipal rebate programs you can combine with state and federal incentives to significantly reduce solar costs.
Despite not being the sunniest state, Minnesota has several solar-friendly policies and utility-based incentives.
At least three public utilities in Minnesota also offer rebate programs for residential solar installations:
Combine these upfront rebates with the 30% federal solar tax credit* to substantially lower the cost of rooftop solar!
*Update: Now that the "One Big Beautiful Bill" is law, residential solar systems must be installed by December 31, 2025 to qualify for the federal solar tax credit. Starting in 2026, homeowners cannot claim a federal solar tax credit.
New York arguably offers the best solar incentive programs for homeowners nationwide. In most cases, you can have over half your project costs covered by some form of incentive. Homeowners in the Con Edison service area can explore our guide on going solar with Con Edison in New York for additional details.
New Jersey features perhaps the most valuable incentive in the country with its Successor Solar Incentive (SuSI). Combined with the federal solar tax credit, Garden State residents can slash their solar costs by well over 50%.
Through the SuSI program, solar owners can earn and sell SREC-IIs valued at $85 for each MW of electricity their system produces for 15 years. With an average system producing approximately 8 MW per year, that totals $680 annually and $10,200 over 15 years.
According to the Office of the Ohio Consumers' Counsel, Ohio hosts over 200 solar companies and is positioned for rapid growth throughout the 2020s. Beyond the 30% federal solar tax credit*, the state provides several incentives encouraging homeowners to fuel Ohio's expanding solar industry. Our guide on going solar with AEP Ohio provides utility-specific information.
*Update: Now that the "One Big Beautiful Bill" is law, residential solar systems must be installed by December 31, 2025 to qualify for the federal solar tax credit. Starting in 2026, homeowners cannot claim a federal solar tax credit.
Several solar incentives at city and county levels can further lower the cost of solar:
Local property tax exemptions in Cleveland and Cincinnati prevent the value added by your solar system from increasing your property taxes Low-interest financing through the Hamilton County Home Improvement Program
Plenty of sunshine and minimal shade make Texas ideal for rooftop solar. However, most incentives come from local and utility sources rather than the state level, so spending extra time researching incentives for your area pays off.
Most solar incentives in Texas come from utilities. These include:
Virginia offers several solar incentives alongside the 30% federal solar tax credit* that can make rooftop solar more affordable than purchasing electricity from a utility provider.
*Update: Now that the "One Big Beautiful Bill" is law, residential solar systems must be installed by December 31, 2025 to qualify for the federal solar tax credit. Starting in 2026, homeowners cannot claim a federal solar tax credit.
Solar incentives vary dramatically from state to state, and understanding what's available in your area can make the difference between a good investment and a great one. With the federal solar tax credit no longer available directly to homeowners starting in 2026, local and state incentives have become more important than ever.
Whether you're considering a direct purchase or exploring Third-Party Ownership options like leases and PPAs, the key is acting quickly. Incentive programs tend to decrease in value over time as solar adoption increases and program budgets get depleted. According to the U.S. Energy Information Administration, electricity prices continue rising, making solar an increasingly attractive investment. States like New Jersey, New York, Illinois, and Maryland offer particularly strong incentive packages that can offset a significant portion of your installation costs.
Take time to research the specific incentives available through your state government, local municipalities, and utility providers. Combining multiple incentives, such as state tax credits with utility rebates and property tax exemptions, maximizes your savings potential. For residential solar design assistance or commercial solar projects, working with experienced professionals ensures you capture every available benefit. Homeowners interested in battery backup systems may also want to explore off-grid solar system design options.
What happened to the federal solar tax credit for homeowners in 2026?
Starting in 2026, homeowners can no longer claim the federal solar tax credit directly. The "One Big Beautiful Bill" eliminated the residential solar tax credit, meaning homeowners who want to benefit from federal incentives must now enter into Third-Party Ownership arrangements like solar leases or Power Purchase Agreements. Under these arrangements, a business owns the system, claims the federal tax credit, and passes some savings to the homeowner through reduced energy costs.
Can I combine multiple solar incentives in my state?
Yes, in most cases you can stack multiple incentives to maximize your savings. For example, you might combine a state tax credit with a utility rebate, sales tax exemption, and property tax exemption. However, some programs have restrictions, so check the specific requirements for each incentive. Consulting with a licensed tax advisor helps ensure you claim all eligible incentives without running into conflicts between programs.
How do Solar Renewable Energy Credits (SRECs) work?
SRECs represent the environmental benefits of generating solar electricity. For every 1,000 kWh (or 1 MWh) of solar energy your system produces, you earn one SREC. You can then sell these credits on open marketplaces to utilities that need to meet renewable energy requirements. SREC values fluctuate based on supply and demand in each state's market. States like New Jersey, Maryland, and Illinois have active SREC programs that can generate hundreds or even thousands of dollars annually for solar owners. The EPA provides detailed information on how these programs work alongside net metering.
What is net metering and why does it matter?
Net metering allows you to send excess electricity your solar panels generate back to the grid in exchange for credits on your utility bill. When your system produces more power than you're using (typically during midday), the surplus flows to the grid and your meter essentially runs backward. Later, when you need more power than your panels produce (at night or on cloudy days), you draw from the grid and use those credits. Net metering policies vary by state and utility, with some offering full retail rate compensation while others provide reduced rates. States like Nevada have specific NV Energy net metering requirements that homeowners should understand. According to SEIA, net metering remains one of the most important policy mechanisms supporting residential solar adoption.
How long do solar incentive programs typically last?
Solar incentive programs don't last forever. Most have sunset dates, funding caps, or declining value structures built in. For instance, utility rebate programs often have annual budgets that run out, and state programs frequently reduce incentive amounts as solar adoption grows. The Illinois Shines Program and New Jersey's SuSI program offer compensation for 15 years, but enrollment windows can close. Acting sooner rather than later locks in current incentive values before programs change or end. Solar Permit Solutions can help you navigate the permitting process quickly to meet program deadlines.
Do solar incentives apply to battery storage systems?
Many states now offer incentives specifically for battery storage, either as standalone programs or as add-ons to solar incentives. California's Self-Generation Incentive Program (SGIP) provides rebates up to $1,000 per kWh of battery capacity. Maryland offers a 30% state income tax credit for battery storage capped at $5,000. New York's PSEG Long Island Battery Storage Rewards compensates homeowners for discharging batteries during peak demand periods. Adding battery storage to your solar system can qualify you for additional incentives while providing backup power and greater energy independence. For questions about your solar project, contact our team for personalized guidance.
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