What Are the State Tax Incentives for Switching to Solar in 2024?


You’ve probably heard about the many incredible benefits of investing in solar power in your home: a lower carbon footprint, decreased utility bills, and so much more. 

Are you considering switching to renewable energy yourself? 

If so, you might have heard about the huge range of tax benefits that are available to those who invest in solar power. Does your state offer those types of programs? 

In this article, we’ll cover the different types of incentives that might be available to you depending on where you live, as well as the top five states with incredible incentives for residents investing in this form of renewable energy. 

Let’s dive right in and find out what you might be able to save on your installation! 

What Solar Incentives Are Available in 2023?

You’ve probably heard about solar incentives being offered to those who install a system to allow them to power their home using electricity converted from sunlight. 

What programs are available in 2023? What might you be able to benefit from? 

We’re here to break all of that down for you to help you understand what savings you can expect to get from incentives in your location. 

Below are some of the types of programs available in 2023 — while you might not be able to benefit from all of them, you can take a deeper look to find out what programs are available in your area.

Before purchasing your equipment with these programs in mind, it’s important to take a closer look at the specific programs offered in your state (if any). This will impact what your return on investment will be. 

These incentives will vary from one state to the next and may have differing requirements, so it’s essential to understand what you’re qualified for to make an informed purchase. In addition, things can change over time, so it’s essential to look into what specific programs are being offered in your area and what their requirements are to make sure you have the most up-to-date information. 

  • Solar Tax Credits: The Federal Solar Tax Credit promotes solar installations by reducing your tax liability by 30% of your system installation cost. The 30% tax credit applies to systems installed between the tax years of 2022 and 2032 and is a deduction from your taxes, not a refund. Make sure to look into the details of the program to ensure you and your solar system are eligible.
  • Net Metering: Net metering refers to when a grid-tied solar panel system sells excess energy back to the grid. This results in a credit on the utility bill, allowing you to save even more money on a regular basis if you generate more electricity than you use. 
  • Solar Property Tax Exemption: Adding a solar system to your home improves your home’s value, so some states will provide a property tax exemption on the value added to your home by your installation. 
  • Solar Sales Tax Exemption: Some states won’t charge sales tax on solar system equipment. Make sure to confirm that the equipment you’re purchasing is eligible in your state for this tax exemption before purchasing, as there may be limitations or requirements on what qualifies. 
  • Solar Rebates: Solar rebates provide a sum of money that’s typically defined in advance if you invest in a solar system. These rebates are more common at the installer, local, or state levels. You typically can qualify for this type of rebate even without owing any federal taxes.
  • Solar Renewable Energy Certificates: Solar Renewable Energy Certificates, also known as SRECs, are credits you can receive that are based on how much electricity is generated by your panels. Some states require public utility companies to purchase a specific number of SRECs from consumers in order to meet goals for renewable energy. If your location has such an initiative, your utility company may buy your SRECs for cash.
  • Performance-Based Incentives: Performance-based incentives are available in some states, which provide a set amount of cash to owners of solar systems for each kilowatt-hour they generate. 
  • Subsidized Loans: Your area may have subsidized loans available to assist you in financing your system. However, make sure that having a loan on your system does not impact eligibility for any other programs you want to use; for example, you must own your system outright for eligibility for the Federal Solar Tax Credit.

Top 5 States for Solar Energy Tax Incentives

If you want to harness the sun’s power, we have good news for you if you live in one of the five states below. Below, we’ll cover the top 5 best states in terms of solar energy tax incentives and an overview of what residents of these states can expect in terms of incentives.

If you live in any of these states, look up the most up-to-date information before investing in your renewable energy solution to ensure nothing’s changed and that you’re getting every benefit you’re entitled to. Some additional programs may be available to you that aren’t listed here. You’ll also want to check out the details of any existing programs to ensure you understand the terms, eligibility requirements, etc. 

The more you can save on your system installation, the shorter your solar payback period will be — and once that’s all said and done, everything you save goes right into your pocket. 

California Solar Incentives

Californians enjoy excellent solar energy tax incentives in their state, putting all that sunshine to good use by creating renewable energy. If you live in California, here’s what you have to look forward to:

  • Federal Solar Tax Credit: As described above, the Federal Solar Tax Credit is a federal program that allows you to reduce your tax liability by 30% of your system installation cost.
  • Property Tax Exemption: California residents won’t need to pay increased property taxes if they install solar panels before the end of 2024. 
  • Net Metering: California legislators voted to revise the terms of net metering in California. 
  • Sales and Use Tax Exemption: Solar equipment, including solar panels, are exempt from sales and use tax for those in California. 
  • Self-Generation Incentive Program: Those who install a solar battery (such as the EcoFlow DELTA Pro) for their business or home in California may qualify for a rebate of 15-20% of the battery cost.

Texas Solar Incentives

Enjoy Texas-sized savings when you go solar in The Lone Star State. Let’s take a look at the benefits available to Texans looking to switch to this form of renewable energy:

  • Federal Solar Tax Credit: Again, the Federal Solar Tax Credit is an excellent benefit that those living in Texas are able to enjoy as well, allowing those who go solar to reduce their tax liability by 30% of the total cost of the system.
  • Property Tax Exemption: Those with solar panels in Texas can apply for an exemption from paying for an increase in their property taxes.
  • Net Metering: Rather than offer a net metering policy that applies statewide, utility companies in the state have policies to credit solar energy system owners for the extra electricity their panels produce. Residents can then use those credits rather than purchasing electricity from the utility if their panels aren’t producing the electricity required to meet their consumption needs, like at night or during cloudy times of the year. 
  • Austin Energy Residential Solar Rebate Program: This program is offered on a more local level. For those living in Austin, Texas, you can complete Austin Energy’s solar education course, and you might be eligible to receive a rebate of $2,500. 

Florida Solar Incentives

If you live in The Sunshine State, we’ve got good news. If you go solar, there are plenty of benefits you’ll be able to enjoy, including financial incentives. Let’s take a look below: 

  • Federal Solar Tax Credit: Floridians are able to take advantage of the Federal Solar Tax Credit in addition to state-level benefits. This tax credit reduces tax liability by 30% of the total cost of investing in solar. 
  • Property Tax Exemption: Floridians who install solar panels don’t need to pay increased property taxes due to their home value increasing. 
  • Sales Tax Exemption: You don’t need to pay sales tax on eligible systems in Florida. Before purchasing, make sure the equipment you are looking at is eligible for this sales tax exemption. 
  • Net Metering: Florida allows net metering, meaning that if you’re a utility customer and your panels generate more electricity than you use, you have the potential to sell Renewable Energy Credits, which can be applied to your energy bills over the next 12 months or paid out.

Arizona Solar Incentives

Looking to invest in renewable energy in Arizona? Here’s what you have to look forward to: 

  • Federal Tax Credit: Arizona residents can benefit from the Federal Solar Tax Credit to reduce their tax liability by 30% of the total installation cost of the system. 
  • Property Tax Exemption: When you install panels, your home’s value increases. In Arizona, you won’t have to pay increased property taxes on this increased value. 
  • Residential Solar and Wind Energy Systems Tax Credit: In Arizona, there’s a statewide tax credit residents can receive that is valued at 25% of their solar panel cost. This is capped at a $1,000 value.
  • Sales Tax Exemption: You won’t have to pay sales tax on panels that you purchase in the state of Arizona.

North Carolina Solar Incentives

North Carolina residents have some benefits they can enjoy as well as a result of making the switch to renewable energy. Check it out below.

  • Federal Solar Tax Credit: North Carolina residents can reduce their federal tax liability by 30% of the solar insulation cost thanks to the Federal Solar Tax Credit. 
  • Property Tax Exemption: Solar panels increase the value of your home, but in North Carolina, if you own a solar system and it’s not used in connection with a business or to generate income, you’re exempt from paying higher property taxes on your solar panels. 
  • Net Metering: Net metering policies allow consumers to receive credits for the excess solar power they produce and don’t consume. If your solar panels generate more electricity than you need, your utility company may buy back this extra power from you; in exchange, you’ll receive a credit.

Final Thoughts

There are tons of solar incentive programs being offered all over the country. From the Federal Solar Tax Credit to state-level initiatives and even programs offered on the local level, there are all sorts of financial incentives available for those looking to go solar.

If you’re looking to power your home using renewable energy, it’s a great time to do so, especially with so many programs being widely available. Regardless of what state you live in, make sure that you do your research on incentives before making a purchase so you make sure you understand the terms, have the most up-to-date information, and aren’t missing out on any valuable incentives you’re entitled to. 

Ready to go solar? Check out EcoFlow’s selection today and start enjoying the many benefits of renewable energy. Whether you’re just looking for something portable for your next camping trip or are looking for a whole home generator to achieve power independence, we have what you’re looking for! You may even qualify for up to 30% of the cost for new, qualified clean energy thanks to the Residential Clean Energy Credit, so get in touch. 

EcoFlow is a portable power and renewable energy solutions company. Since its founding in 2017, EcoFlow has provided peace-of-mind power to customers in over 85 markets through its DELTA and RIVER product lines of portable power stations and eco-friendly accessories.

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