These 5 States Have The Highest Tax Credits For Solar Panels In 2024
Getting a home set up for solar power can be a complicated process with many factors you need to consider along the way. Outside of the most important hurdle of whether or not you can install solar panels in the first place (zoning, permits, local laws, etc.), one of the biggest potential concerns is the cost.
Fortunately, there are several programs available to help get you set up — primarily the U.S. government's own Investment Tax Credit (ITC), but some states also offer special financing and other incentives. Aside from the ITC though, there's no real uniformity across the states. And even then, some states handle the ITC a little differently.
Figuring out which state is the best for installing solar panels is tough to pin down because there are many variables and different incentives that can make up the discrepancies in one area or widen that gap between them in others. Moreover, Federal and state laws and programs can change as time progresses. So before you go signing any paperwork or transferring funds, it's recommended that you take a few minutes to double-check your state's available programs, what you may qualify for, and how much you may earn or save.
Federal and State tax credits
The current Federal ITC program for installing solar panels is available in all U.S. states. This means no matter where you live, you can earn a tax credit valued at 30% of your total solar system cost, Though the percentage is going to get smaller after 2032, dropping to 26% in 2033, 22% in 2034, and possibly ending completely in 2035 — depending on whether or not Congress renews it.
Something to remember with the Federal ITC is that the number of credits you can receive depends on how much your system costs in the first place and whether or not there's a maximum limit in your state. Not all states have an ITC cutoff number, but some do, so it's important to check before you make a move to invest your money.
State-level tax credits are also available in some locations, but many offer other incentives (rebates, tax exemptions, etc.) instead. Once again, it's worth looking into before you commit to installing a solar system, and most of these State tax credits have their own maximums.
The states in question
Each of the five states mentioned below has been chosen based on a combination of their average Federal rebate values plus any State rebate averages maximums, as reported by EcoWatch, ordered from highest to lowest credit amount. Note that this is going by tax credits only — some states may offer a better overall value based on other non-credit incentives.
- South Carolina currently provides the most in terms of overall tax credit value when you account for Federal and State. With a Federal ITC average of $10,791 and SC itself offering 25% of your total system value at a maximum of $3,500, you're looking at $14,291 in credits.
- New York follows close behind, with its Federal ITC average of $6,864. Which isn't close to $14 grand, certainly, but when you add in the credit from 25% of your system value and a max of $5,000 — for a total of $11,864.
- Virginia sits in the middle, with no state tax credits but an average Federal ITC of $11,055.
- Texas is right behind Virginia with a current Federal ITC of approximately $10,971.
- Florida doesn't have state-specific tax credits to offer potential solar adopters, but it does have the fifth-highest average for Federal ITC credits at approximately $10,488.
Please remember, however, that these credit values aren't set in stone and may fluctuate based on the cost of a given system's price.