Solar Incentives by State

April 27,2019

In March 2019, the SEIA and Wood Mackenzie Power & Renewables U.S. have released the “Solar Market Insight Report” that shows the major trends in the U.S. Solar Industry in 2018. According to the report, the U.S. installed 10.6 GW of new PV capacity in 2018 which is enough to power more than 12.3 million American homes. In all the new electric capacity installed in 2018, solar has accounted for 29%, standing second next to natural gas. These facts clearly state that our future depends on our ability to utilize solar and other renewable sources of energy. New advancements in solar technology combined with government’s support through tax incentives are some key encouraging factors that boost people’s adoption of clean energy.

In this week’s livestream, Patrick and Andrew talk about the solar rebates available to claim this year. Of the best states to go solar, they break down various solar incentives. They also share some interesting updates on Federal Tax Credit.

Best States for Solar – Solar Incentives by State

1. New York
2. New Jersey
3. Massachusetts
4. Washington D.C.

1. New York Solar Incentives

The following solar incentives and rebates are available in New York that makes it one of the best states to go solar.

1. Mega Watt (MW) Block rebates
2. State tax credit
3. NYC Tax Abatement

MW Block Rebates:

• Introduced by NYSERDA, MW Block rebates program offers financial incentives for residential, nonresidential, and commercial solar projects. This incentive program is divided into regions across the state (ConEdison, Upstate, and Long Island).
• NY-Sun designates a specific amount of incentives to each of these three regions. Each region is then broken into blocks that are designated with megawatts (MW). If one block is filled, then the next block will be opened and incentives will be available until all blocks within a region/sector are fully subscribed.
• Long Island has fully utilized this program and all the tiers are filled up. ConEdison and Upstate NY are in Block 8 with $0.30/Watt and $0.35/Watt respectively.
• Click here for more details on MegaWatt Block rebate program.

State Tax Credit or Solar Energy System Equipment Credit:

• New York’s System Equipment Credit is one of the best state tax credits available for solar.
• For people who purchase solar systems in New York, they are given a credit worth 25% of their system cost, or $5,000 (whichever is less).

NYC Tax Abatement:

• People living in New York City can take advantage of this property tax abatement run by the NYC Department of Buildings.
• Homeowners who have installed a solar PV system are eligible for a property tax abatement equal to 20% of the total system cost (after rebate), applied against their property taxes over four years.

By combining all the available rebates along with Federal Tax Credit, a New Yorker can recoup 70-75% on the net amount of the solar panel system. All these factors make it a perfect time and a perfect place for you to go solar in New York right now.

2. New Jersey Solar Incentives

New Jersey ranks among the top ten solar states in America and the following incentives are boosting solar adoption in the Garden State. 

1. New Jersey Solar Renewable Energy Credits (SRECs) – Varies depending upon the market value
2. Property Tax Exemption – Property Tax Exemption on Added Home Value from Solar System

New Jersey Solar Renewable Energy Credits (SRECs):

• New Jersey helps its homeowners to save on their Solar System using SRECs.
• For every megawatt-hour your solar energy system generates, you will be credited with one SREC.
• The earned SRECs can then be sold on a market to utilities to help them meet the New Jersey Renewable Portfolio Standard (RPS).
• The whole purpose of the SRECs is for the utilities to produce a certain percentage of their power from green sources.
• SREC program will allow them to not to build a solar array but to take your solar and claim it as their own production and they compensate you for that.

Federal Solar Tax Credit:

• Using Federal Tax Credit, (also known as the Invest Tax Credit), you will be able to save 30% on the cost of your solar system.
• This, in general, applies to all residential installations which are purchased either with cash or loan.

Property Tax Exemption:

• If you are a resident of New Jersey and planning to invest in a solar energy system, you will not have to pay any additional property taxes.

In addition to the above incentive programs, you can also save from net metering which enables you to sell your over-produced energy back to the grid.

3. Massachusetts Solar Incentives

The following solar incentives and rebates are available in Massachusetts that makes it one of the states that are good to go solar.

1. Solar Massachusetts Renewable Target (SMART) Program
2. Mass Solar Loan Program
3. Massachusetts Personal Income Tax Credit

For more details on Massachusetts solar rebates and incentives, click here.

Solar Massachusetts Renewable Target (SMART) Program

• In addition, the state also provides higher incentive rates for low-income customers or those who install battery storage to pair with their solar panel system, making solar power more accessible to more customers in the state.
• Launched by the Department of Energy Resources (DOER) and investor-owned utilities in Massachusetts, SMART is a production-based incentive paid directly to the owners of the solar energy systems by the investor-owned utilities like Eversource, National Grid, and Until.
• If you are in Massachusetts and have installed a solar system on your roof, your utility pays a fixed rate per kilowatt hour produced by your PV system for 10 years.
• Depending upon the size of your system, the amount your utility pays for a KWH varies.
  • Low-income customer – $0.322 per kWh
  • Less than or equal to 25 kW – $0.28 per kWh
  • 25 kW to 250 kW – $0.21 per kWh
  • 250 kW to 500 kW – $0.175 per kWh
  • 500 kW to 1,000 kW – $0.154 per kWh
  • 1,000 kW to 2,000 kW – $0.14 per kWh

Mass Solar Loan

• Mass Solar loan is a state-run program that connects homeowners with low-interest loans for their solar energy systems.
• As it helps the homeowners to own a PV system by making fixed, low-interest loan payments instead of complex third-party ownership agreements, this program is considered as the biggest reason behind the increased solar adoption in the state.

Massachusetts Personal Income Tax Credit

• If you have installed a PV system on your property in Massachusetts, you can get a credit of $1,000 or 15% of qualifying project costs, whichever is less.

In addition to the above incentives, a homeowner in Massachusetts is eligible for 30% Federal Tax Credit. You can also take advantage of SRECs and net metering to save on your solar panel system.

4. Washington D.C. Solar Incentives

With the climate and energy plan, Clean Energy D.C., the capital state aims to cut greenhouse gas emissions to half by 2032. Instead of depending upon fossil fuels, this makes a good time for people to consider solar in Washington D.C. Below are a few solar incentives provided by the state to accelerate solar adoption.

1. Washington DC Solar Renewable Energy Credits (SRECs)
2. Property Tax Exemptions

Read our blog about going solar in Washington D.C.

Washington D.C. Solar Renewable Energy Credits (SRECs)

• If you have installed a PV system on your property, you can sell your SRECs on the marketplace and can generate up to $500/MWh.
• In order to meet the state’s RPS goal of solar contributing 2.5% of the electric needs by 2023, utilities will purchase your SRECs.
• Check out today’s SRECs value here.

Property Tax Exemptions

• With the “Solar Energy System and Cogeneration System Personal Property Tax Credit”, you will not be paying any additional property taxes on the value you are adding to your house by installing that solar energy system.

Federal Solar Tax Credit

• Similar to the other states that are considered as good places to have solar on your property, Washington D.C. also offers Federal Tax Credit.
• The Federal Tax Credit will help you to save 30% on the total cost of your solar system.

In addition to the above incentives, you can take advantage of net energy metering and Solar For All Program to save more on your solar panel systems in Washington D.C.