Incentives Can Make Solar and Energy Efficiency a Better Deal

Incentives Can Make Solar and Energy Efficiency an Even Better Deal

Solar panels and energy efficient home improvements can reduce your energy bills, but the benefits don’t stop there. You’re also creating public benefits such as reducing pollution and supporting jobs – which helps to explain why many state and local governments offer incentives for these energy-smart home upgrades.

In this post, we’ll show you how to find out what kinds of solar incentives are available where you live and give you examples of how much they can be worth. We’ll also discuss the federal solar tax credit. By lowering costs, these incentives can make solar and energy efficiency an even better deal!

Please note that the availability of Federal & State Tax Credits is dependent on your unique financial situation. Please consult a tax professional regarding your eligibility.

Federal Solar Tax Credit

Homeowners anywhere in the U.S. may be eligible for the federal solar tax credit, which can be worth up to 30% of the total cost of your solar installation.

Under current law, the 30% tax incentive will remain in effect for solar installations completed before December 31, 2032. After that it will drop down to 26%.

It’s important to keep in mind that this is a tax credit and not a rebate, so you’ll need to pay taxes in order to claim this incentive. Check out our handy explainer for more details on how the federal tax credit works and how you can claim it.

State Solar Incentives

As of October 2018, the DSIRE database counts a whopping 143 different state-level financial incentives for residential solar available across 43 U.S. states plus Washington, DC, along with 44 incentives available from local governments.

These incentives can be worth anywhere from hundreds to thousands of dollars. For example:

As you can see, you can find extra incentives to go solar in every part of the country, and it can really pay to be aware of them. You can enter your ZIP code into DSIRE to find out what’s available where you live.

State Energy Efficiency Incentives

Many states and local jurisdictions also offer incentives to reduce the cost of investments in the energy efficiency of your home – and you can find them the same way. In the DSIRE database, there are 110 residential energy efficiency financial incentives in 40 states, along with 50 different incentives offered at the local level nationwide.

In contrast to home solar incentives that only cover one technology, energy efficiency incentives may cover a wide range of equipment, potentially including heat pumps, ENERGY STAR appliances, insulation, or other types of purchases. And, while some of these incentives are applicable only to new construction, some states offer incentives such as grants, rebates, and tax credits for energy efficient home improvements as well. For example:

  • Arizona provides property tax exemptions for energy efficient “high performance building components”
  • Connecticut exempts a wide range of residential weatherization equipment from state sales and use taxes
  • Hawaii offers rebates of up to $300 for a wide range of ENERGY STAR-rated equipment purchases
  • Massachusetts offers grants of up to $6,000 per household for air-source heat pump installations
  • Montana provides income tax credits of 25% of costs of a wide range of energy efficiency equipment, up to $1,000
  • Wisconsin offers rebates up to $750 for a wide range of efficient heating and cooling equipment purchases

As with solar incentives, you can enter your ZIP code into DSIRE to find out what’s available where you live.

Learn More About Incentives – and Financing

If these incentives, rules, and overlapping jurisdictions seem overwhelming, don’t worry – in many cases, local installers and contractors can walk you through the ins and outs of the policies that may apply to you and how they can impact the cost of your home improvement projects.

And of course, loans provided through Mosaic can help you finance the cost of all of these energy-smart home upgrades!

 

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