US Solar Incentives & Grants 2025
Between the federal 30% Investment Tax Credit and state-level rebates, net metering, and SRECs, the average US homeowner can cut their solar installation cost by 40–60%. Here's every incentive available to you.
Muhammad founded KilowattKit after spending hours trying to decode confusing electricity bills — and realising there were no simple, jargon-free tools to help ordinary homeowners understand their energy costs. He researches electricity rates, EV charging, solar payback, and heat pump economics across the US, UK, Canada, and Australia.
Types of Solar Incentives in the US
Federal Investment Tax Credit (ITC)
All statesThe biggest solar incentive in the US. Reduce your federal income tax bill by 30% of your total solar installation cost — including panels, inverter, battery storage, and labor. Locked in at 30% through 2032.
State Rebates & Tax Credits
Varies by stateOn top of the federal ITC, many states offer their own rebates (cash back), income tax credits, or utility rebates. New York, Massachusetts, California, and New Jersey have some of the strongest state-level programs.
Net Metering
Most statesNet metering lets you sell surplus solar electricity back to your utility at the retail electricity rate — effectively using the grid as a free battery. 40+ states mandate some form of net metering, though rules vary significantly. California's NEM 3.0 (2023) significantly reduced export credits, making batteries more valuable.
SRECs (Solar Renewable Energy Credits)
Select statesFor every 1,000 kWh (1 MWh) your solar system generates, you earn one SREC, which utilities must buy to meet their renewable portfolio standards. Active markets include New Jersey, Massachusetts, Maryland, Pennsylvania, Illinois, and Washington DC. SREC prices fluctuate — NJ SRECs have traded between $200–$300 in recent years.
Property Tax & Sales Tax Exemptions
Many statesSolar panels typically increase home value, but 36 states exempt that added value from property tax reassessment — so you won't pay more property tax after going solar. Additionally, 25 states have sales tax exemptions on solar equipment, saving you 5–10% upfront.
In-Depth Guides
Federal Solar Tax Credit (ITC)
How the 30% credit works, what qualifies, how to claim on Form 5695, and the step-down timeline.
Full guide →State Solar Incentives & Rebates
Best state programs ranked — NY-Sun, SGIP, Mass SMART, SREC markets, net metering rules, and more.
Full guide →US Solar Incentives at a Glance
| Incentive | Who qualifies | Typical value | How claimed |
|---|---|---|---|
| Federal ITC (30%) | All US homeowners with tax liability | ~$6,000–$9,000 | IRS Form 5695 |
| NY State Credit | NY residents with tax liability | Up to $5,000 | Form IT-255 |
| MA SMART Program | Eversource/National Grid customers | Varies by capacity block | Utility billing |
| NJ SRECs | NJ grid-connected solar owners | ~$200–$300/SREC/yr | SREC broker/aggregator |
| CA SGIP Battery | CA residents (income tiers) | $200–$1,000/kWh | Via approved contractor |
| Property tax exemption | Homeowners in 36+ states | $500–$2,000/yr saved | Automatic in most states |
| Sales tax exemption | Buyers in 25+ states | $1,000–$3,000 saved | Applied at purchase |
Use our solar calculators to estimate your payback period, SEG/net metering income, and whether battery storage stacks up financially.
Important note on accuracy
Solar incentive programs change frequently — state budgets run out, new programs launch, and utility net metering rules are revised. Always verify current terms with your state energy office, the Database of State Incentives for Renewables & Efficiency (DSIRE at dsireusa.org), and your chosen installer before making financial decisions.