2026 Government Rebates for Solar

Saving Money on Solar: A Guide to Tax Credits in 2026

If you have decided to go solar, you are in good company. Solar installations grew rapidly throughout the early 2020s as homeowners realized the technology’s benefits and perks. Solar panel installation can reduce monthly energy bills and lessen your household’s dependence on energy generated by fossil fuels. Over time, solar energy systems can help stabilize long-term electricity costs while reducing environmental impact.

In the past, solar installation was cost-prohibitive for many U.S. households. Federal incentives helped accelerate adoption and lower installation costs for many years. However, recent federal legislation — including the One Big Beautiful Bill Act (OBBBA) — eliminated the federal Residential Clean Energy Credit for new residential solar installations.

Although the federal credit is no longer available for new projects, homeowners may still be able to reduce solar installation costs through state programs, local rebates, and utility incentives.

In this guide, we break down the types of state, local, and utility rebates and tax incentives that may still be available. We also include examples and resources to help you maximize your potential solar savings.

Federal Solar Incentives in 2026

As of January 1, 2026, the federal Residential Clean Energy Credit for residential solar installations has been eliminated for new projects under the OBBBA legislation.

For many years, homeowners were able to claim a federal tax credit equal to a percentage of their solar installation costs. That program helped reduce the upfront cost of solar panels and battery systems. However, homeowners installing solar systems now cannot claim a federal income tax credit for new residential solar installations.

Homeowners should still consult a tax professional if they installed solar panels in previous years, as earlier projects may still qualify for credits under the rules that applied at the time of installation.

While the federal incentive is no longer available for new installations, many state governments, local municipalities, and utilities continue to offer solar incentives designed to encourage renewable energy adoption.

These programs now play a larger role in reducing the overall cost of solar installations.

State and Local Government Programs

Even without a federal tax credit, many states, counties, and cities offer incentive programs to promote renewable energy adoption. These programs can help offset installation costs or improve the long-term financial return of solar systems.

Common types of state and local incentives include:

• State solar tax credits
• Sales tax exemptions
• Property tax exemptions
• Performance-based incentives
• Net metering or net billing programs

For a comprehensive list of available programs, visit the Database of State Incentives for Renewables & Efficiency (DSIRE). The site maintains updated information about solar incentives across the United States.

Below is a snapshot of several states known for strong solar incentive programs.

Arizona Solar Incentives

With more than 300 sunny days annually and several available programs, Arizona remains a strong market for residential solar energy.

Arizona Residential Solar Income Tax Credit

Homeowners who install solar systems may qualify for a state tax credit equal to 25% of the system cost up to $1,000.

Sales Tax Exemption

Solar panels and solar battery equipment are exempt from Arizona state sales tax, reducing upfront installation costs.

Property Tax Exemption

Arizona homeowners do not pay property taxes on the increased home value resulting from a solar installation.

Net Billing

Most Arizona utilities compensate homeowners for excess solar energy at wholesale electricity rates through net billing programs.

Mojave Electric Cooperative SunWatts Program

Some utilities offer additional rebates. For example, the Mojave Electric Cooperative has historically provided solar installation rebates based on system size, along with incentives for battery storage.

Program availability and funding levels may change, so homeowners should confirm details with their local utility provider.

Massachusetts Solar Incentives

Massachusetts consistently ranks among the top states for residential solar adoption due to a combination of state incentives and utility programs.

Massachusetts Solar Tax Credit

Homeowners may qualify for a state tax credit equal to 15% of solar installation costs, up to $1,000.

Sales Tax Exemption

Solar equipment purchases are exempt from Massachusetts sales tax.

Property Tax Exemption

Homeowners are not required to pay additional property taxes based on increased home value from solar installations.

Solar Massachusetts Renewable Target (SMART) Program

The SMART program provides performance-based incentives for solar electricity generation. While program availability has evolved over time, some installations — especially those paired with energy storage — may still qualify for ongoing compensation.

Net Metering

Massachusetts utilities allow homeowners to receive credits for excess electricity generated by their solar systems.

New York Solar Incentives

New York offers several programs that can significantly reduce the cost of installing residential solar panels.

New York Solar Tax Credit

Homeowners may receive a state tax credit equal to 25% of installation costs up to $5,000.

Sales Tax Exemption

Solar equipment purchases are exempt from state sales tax.

Property Tax Exemption

New York homeowners typically do not pay additional property taxes related to solar-driven home value increases.

NY-Sun Program

The NY-Sun program provides state-level incentives and rebates through approved contractors to help reduce solar installation costs.

Net Metering

Many New York utilities provide bill credits for excess solar electricity generated by homeowners.

Utility Company Solar Incentives

In addition to state programs, some electric utilities offer incentives designed to encourage renewable energy adoption.

These incentives vary widely by location and may include:

• Net Metering: Net metering programs allow homeowners to receive bill credits for excess electricity produced by their solar panels.
• Net Billing: Similar to net metering, net billing compensates homeowners for surplus electricity generation, but typically at wholesale or reduced rates.
• Battery Incentives: Some utilities offer additional rebates for home energy storage systems, especially in regions where battery systems help stabilize the electrical grid.

Because utility incentives frequently change, homeowners should contact their local provider to confirm program details and eligibility requirements.

Manufacturer and Installer Solar Incentives

Solar panel manufacturers and installation companies occasionally offer their own incentives or promotions.

These may include:

• Cash rebates
• Limited-time installation discounts
• Equipment bundles
• Promotional financing offers

These incentives can vary widely by provider and region. A professional solar contractor can help identify any manufacturer or installer promotions currently available.

Solar Financing and Leasing Options

Solar installation still represents a significant upfront investment for many homeowners. For this reason, many solar companies offer financing options.

Solar Financing

Many installers provide loan programs that allow homeowners to spread the cost of installation over several years. Loan terms, interest rates, and eligibility requirements vary by company.

Solar Leasing

Solar leasing allows homeowners to install panels with little or no upfront cost by paying a monthly fee to use the system.

While leasing reduces initial costs, homeowners typically do not own the solar equipment, which means they may not qualify for certain state incentives or rebate programs that require system ownership.

How to Apply for Solar Rebates

1. Research Applicable Incentives

Start by identifying which programs apply to your location. State governments, municipalities, and utility providers may each offer separate incentives.

The DSIRE database is one of the most reliable resources for finding currently available solar incentive programs.

2. Start the Paperwork

Some rebate programs require applications before installation begins. Many solar contractors are familiar with local incentive programs and may assist homeowners with the application process.

3. Complete Installation and Inspections

Professional installation ensures your solar system meets program eligibility requirements. Many incentive programs require certified installers and final inspections.

Installers typically help homeowners gather documentation such as:

• Proof of purchase
• Installation receipts
• Inspection approvals
• System specifications

Solar Incentives Takeaways

Although the federal solar tax credit is no longer available for new residential installations, many homeowners can still reduce solar costs through state incentives, local programs, and utility rebates.

These programs can help offset installation costs and improve the long-term value of solar energy systems.

Ready to go solar? Explore our network of professional solar contractors near you and get customized quotes for your home.