Solar Incentives By State: Complete Guide To Rebates, Tax Credits, And Savings In 2026

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:

• State tax credits ranging from 15% to 25% of installation costs (up to $5,000 in New York)
• Sales tax exemptions eliminating 5% to 8% in upfront costs in most states
• Property tax exemptions preventing increased home assessments after solar installation
• Net metering programs compensating solar owners for excess electricity at retail rates
• Solar Renewable Energy Credits (SRECs) worth $4 to $85 per megawatt-hour depending on state
• Utility rebates offering $500 to $6,000 in upfront savings

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

Arizona Solar Incentives

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.

California Solar Incentives

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 Solar Incentives

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.

Additional Utility-Based Solar Incentives in Colorado

These Colorado utilities also provide some form of rebate or rewards program:

• San Miguel Power Association 
• Colorado Springs Utilities 
• Aspen Electric 
• Holy Cross Energy 
• La Plata Electric Association 
• Black Hills Energy

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Connecticut Solar Incentives

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.

Connecticut’s Residential Energy Solutions Program

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.

Florida Solar Incentives

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 Solar Incentives

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 Solar Incentives

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.

Local Government Solar Incentives in Maryland

Beyond the state property tax exemption, several counties offer local property tax credits worth up to $5,000 annually. These include:

• Baltimore County 
• Anne Arundel County 
• Prince George’s County 
• Harford County

Consult a licensed tax advisor to create a strategy for claiming these local incentives.

Massachusetts Solar 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.

Utility-Based Solar Incentives in Massachusetts

Massachusetts also features numerous municipal rebate programs you can combine with state and federal incentives to significantly reduce solar costs.

• Municipal utilities offering rebate programs include:
• Ipswich Electric Light Department 
• Shrewsbury Electric & Cable Operations 
• Wakefield Municipal Gas and Light Department 
• Reading Municipal Light Department 
• Hudson Light & Power 
• Concord Municipal Light and Power 
• Taunton Municipal Lighting Plant

Minnesota Solar Incentives

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:

• Rochester Public Utilities – $500 
• Owatanna Public Utilities – $500 
• Austin Utilities – $500

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 Solar Rebates

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 Solar Rebates

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%.

NJ SuSI Program at a Glance

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.

Ohio Solar Incentives

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.

Local Government Incentives

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

Texas Solar Incentives

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.

Texas State and Local Government Solar Incentives

Texas Utility-Based Solar Incentives

Most solar incentives in Texas come from utilities. These include:

Virginia Solar Incentives

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.

Conclusion

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.

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