Homeowners today are embracing renewable energy, and solar lighting is no exception. Most homeowners understand the benefits of owning solar systems, but the real concern is the cost. Fortunately, there are federal, state, and local programs and incentives to help offset the upfront costs of installing a solar system in your home. Here are the top solar incentive programs that might be right for you. 

Popular solar-assistance initiatives in the United States

Many states have excellent incentive programs in addition to the federal solar tax credit scheme, which is open to all Americans. For example, Vermont has an Investment Tax Credit program that reimburses up to 30% of eligible expenses. The various schemes in New Jersey can save energy consumers up to $936 per year. In Arizona and Alabama, you can get a $1,000 installation incentive and benefits for the next 10-20 years. 

Cost-saving options to help offset the upfront expenses 

  • Taxpayers can claim up to 26% of qualified expenses for investing in a solar system for their own home under the Residential Renewable Energy Tax Credit at the federal level. On-site labor, the cost of constructing and installing the system, and the connected pipe and wiring costs are all eligible expenses. If the total amount of the tax credit exceeds the homeowner’s tax liability, some of it can be carried forward to the following year.
  • In addition to the federal credit, several states offer tax credits or other incentives for installing solar energy installations.
  • Some utility companies and cities offer incentives to people who purchase solar panels. However, because solar technology has become less expensive, these incentives are becoming harder to find.
  • Some utility companies offer performance-based incentives, paying customers a set amount for every kilowatt-hour of solar output. 

How long does it take to recover your investment?

Most Americans spend a few hundred dollars every month on electricity. When you invest in a solar system, the power that your solar panels generate replaces the traditional electricity you would buy from the utility company. This helps completely eliminate or, at least, reduce your electricity expenses.

That said, solar panels usually require a large upfront investment. Fortunately, most solar panels have a 25-year life span and a 25-year warranty. So, customers often recover their investment in 5-8 years. With all the incentives offered, this means you could get free electricity and bonus credits for the remaining years.