Incentive guides
Solar incentives by state
The 30% federal residential credit ended for systems installed after December 31, 2025 — so what your state offers is now the whole incentive picture for a purchased system. This page compares solar incentives by state across all 50 states and D.C.: tax credits, rebates, SREC markets and sales and property tax exemptions, with a one-line summary for every state and a full guide behind each name.
The short version: state solar tax credits are now rare. Just 7 states offer one, and most are capped low enough that the cap, not the percentage, decides what you get back. 22 states run a rebate or performance-payment program, 7 have an SREC market worth selling into, and 13 offer nothing meaningful at all — in those, what your utility pays for exported power is the only lever that matters.
7
states with a tax credit
22
with a rebate or performance payment
7
with an SREC market
13
with no meaningful incentive
| State | Overall | What it offers | Tax credit | Rebate | SREC | Tax exemptions |
|---|---|---|---|---|---|---|
| Alabama AL | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Alaska AK | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Arizona AZ | Moderate | 25% state tax credit (capped at $1,000) | Yes | — | — | Sales + Property |
| Arkansas AR | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| California CA | Moderate | SGIP battery rebate | — | Yes | — | Property |
| Colorado CO | Moderate | Utility and municipal rebates plus full tax exemptions | — | Yes | — | Sales + Property |
| Connecticut CT | Moderate | Residential Renewable Energy Solutions tariff | — | Yes | — | Sales + Property |
| Delaware DE | Moderate | Green Energy Program grants plus SRECs | — | Yes | Yes | — |
| Florida FL | Limited | Sales and property tax exemptions | — | — | — | Sales + Property |
| Georgia GA | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Hawaii HI | Strong | 35% state tax credit (capped at $5,000) | Yes | — | — | — |
| Idaho ID | Moderate | State income tax deduction (40% year one) | Yes | — | — | — |
| Illinois IL | Strong | Illinois Shines (Adjustable Block Program) | — | Yes | Yes | Property |
| Indiana IN | Limited | Sales and property tax exemptions | — | — | — | Sales + Property |
| Iowa IA | Limited | Five-year property tax exemption | — | — | — | Property |
| Kansas KS | Limited | Property tax exemption | — | — | — | Property |
| Kentucky KY | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Louisiana LA | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Maine ME | Limited | Net energy billing (near-retail export credit) | — | — | — | — |
| Maryland MD | Strong | Residential Clean Energy Grant plus an active SREC market | — | Yes | Yes | Sales + Property |
| Massachusetts MA | Strong | 15% state tax credit plus the SMART performance incentive | Yes | Yes | — | Sales + Property |
| Michigan MI | Limited | Property tax exemption | — | — | — | Property |
| Minnesota MN | Moderate | Xcel Solar*Rewards performance incentive | — | Yes | — | Sales + Property |
| Mississippi MS | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Missouri MO | Limited | Intermittent utility rebates | — | Yes | — | — |
| Montana MT | Limited | Property tax exemption | — | — | — | Property |
| Nebraska NE | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Nevada NV | Limited | NV Energy storage incentives | — | Yes | — | Property |
| New Hampshire NH | Moderate | State residential rebate (limited funding cycles) | — | Yes | — | Property |
| New Jersey NJ | Strong | SuSI / SREC-II payments for 15 years | — | Yes | Yes | Sales + Property |
| New Mexico NM | Strong | 10% state tax credit (capped at $6,000) | Yes | — | — | Sales + Property |
| New York NY | Strong | 25% state tax credit plus NY-Sun rebates | Yes | Yes | — | Sales + Property |
| North Carolina NC | Limited | Property tax exemption; periodic Duke rebates | — | Yes | — | Property |
| North Dakota ND | Limited | Property tax exemption | — | — | — | Property |
| Ohio OH | Limited | ECO-Link discounted financing | — | Yes | — | — |
| Oklahoma OK | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Oregon OR | Moderate | Energy Trust of Oregon cash incentive ($3,500 PGE, $2,500 Pacific Power) | — | Yes | — | Property |
| Pennsylvania PA | Limited | SREC market (modest prices) | — | Yes | Yes | — |
| Rhode Island RI | Strong | Renewable Energy Fund grants plus the REG tariff | — | Yes | — | Sales + Property |
| South Carolina SC | Strong | 25% state tax credit | Yes | — | — | Property |
| South Dakota SD | Limited | Partial property tax exemption | — | — | — | Property |
| Tennessee TN | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Texas TX | Moderate | Utility rebates plus a property tax exemption | — | Yes | — | Property |
| Utah UT | None | No state credit or rebate — only property tax exemptions | — | — | — | Property |
| Vermont VT | Limited | Net metering siting and REC adjustors | — | Yes | — | Sales + Property |
| Virginia VA | Limited | SREC market plus local property tax exemptions | — | — | Yes | Property |
| Washington WA | Moderate | Sales tax exemption on qualifying systems | — | — | — | Sales |
| Washington, D.C. DC | Strong | The most valuable SREC market in the country | — | Yes | Yes | Property |
| West Virginia WV | None | No state incentive — economics rest on utility export rates | — | — | — | — |
| Wisconsin WI | Strong | Focus on Energy statewide rebate | — | Yes | — | Sales + Property |
| Wyoming WY | None | No state incentive — economics rest on utility export rates | — | — | — | — |
Reviewed September 2026, informed by EIA, NREL, LBNL, DSIRE. Programs change frequently and several are funding-capped. This is a starting point, not tax advice — verify current status before relying on any figure.
States with a solar tax credit
These 7 states offer a residential solar income tax credit against state tax. Every one is capped, and a credit is only worth what you owe — check your liability before treating it as a discount.
Arizona solar tax credit
25% of system cost, capped at $1,000
Hawaii solar tax credit
35% of system cost, commonly capped at $5,000 for residential
Idaho solar tax credit
Deduction, not a credit: 40% of cost in year one plus 20% for three more years, subject to annual caps
Massachusetts solar tax credit
15% of system cost, capped at $1,000
New Mexico solar tax credit
10% of system cost, capped at $6,000, drawn from a statewide annual fund
New York solar tax credit
25% of system cost, capped at $5,000
South Carolina solar tax credit
25% of system cost, capped per year at $3,500 or 50% of tax liability, carrying forward up to 10 years
States with a solar rebate or performance payment
No state income tax credit in these, but a rebate, grant or per-kilowatt-hour performance payment instead. Several are funding-capped and have closed mid-year before.
States with an SREC market
In these 7, your system earns certificates you can sell per megawatt-hour generated — income that continues for years rather than arriving once.
Frequently asked questions
Is there a federal solar tax credit in 2026?
No. The 30% federal residential clean energy credit (Section 25D) ended for systems installed after December 31, 2025 under the One Big Beautiful Bill Act. Purchased residential systems installed in 2026 receive no federal credit. Leased and PPA systems may still benefit indirectly, because the system owner can claim the commercial 48E credit through 2027.
Which states have the best solar incentives?
By the strength of the state-level stack, the standouts include Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New Mexico. These combine some mix of a state income tax credit, an upfront rebate or performance payment, a valuable SREC market, and sales or property tax exemptions.
How many states offer a solar tax credit?
7 states currently offer a state income tax credit for residential solar, and 22 offer a rebate or performance-payment program. 13 states offer no significant state-level incentive at all, leaving utility export compensation as the only lever.
Do solar incentives change often?
Frequently. State credits get capped, phased down or repealed; rebate programs exhaust annual funding partway through the year; SREC prices move with the market. Several programs listed here are funding-dependent. Always verify current status with the administering agency or DSIRE before counting an incentive in your budget.