Solar Tax Credits & Incentives Guide 2026 (2026)

The ITC provides a 30% dollar-for-dollar tax credit on your total solar installation cost. For a $20,000 system, that's a $6,000 credit. It applies to equipment, labor, permitting, and sales tax. The credit can be carried forward to future tax years if your liability is insufficient.

The 30% ITC remains through December 31, 2032. It steps down to 26% in 2033 and 22% in 2034. After 2034, the residential credit expires unless Congress extends it. This timeline creates urgency for homeowners considering solar.

Many states offer additional incentives stacked on top of the federal ITC. New York offers 25% up to $5,000. South Carolina provides 25% with no cap. Hawaii offers 35% of system cost. State rebates from Colorado, Maryland, and others provide $500-$5,000 in direct cash back.

SRECs are tradeable certificates worth $25-$250 each in qualifying states. Massachusetts SRECs trade around $250, New Jersey TRECs at $200, and Maryland SRECs at $65. A typical system generates 6-10 SRECs per year, providing significant ongoing income.

Most states with strong solar markets offer property tax exemptions, meaning your home value increase from solar doesn't raise property taxes. Many also exempt solar equipment from sales tax, saving 5-10% on installation costs.