Section: Incentives & Policy

State Solar Incentives Guide 2026: How to Find What's Available Where You Live

By ClearWatt Editorial Team · Published July 22, 2026 · Last updated August 9, 2026

State solar incentives are set independently of federal tax law, so the federal Section 25D credit’s expiration on January 1, 2026 did not change any state, local, or utility program. What is and isn’t available depends heavily on where you live and even which utility serves your address, and programs change often enough that this guide focuses on the categories of incentives to look for and how to verify current details, rather than listing figures that may already be outdated by the time you read them.

The federal credit ending doesn’t touch state programs

It’s worth repeating because it’s a common point of confusion: the 30% federal residential solar tax credit (Section 25D) expired for systems placed in service on or after January 1, 2026, under the One Big Beautiful Bill Act. That is a federal tax provision. State tax credits, state rebate programs, property tax exemptions, sales tax exemptions, net metering rules, and community solar programs all operate under separate state laws or utility tariffs, and none of them were repealed or altered by that federal change. See Federal Solar Tax Credit 2026: What Changed and What You Can Still Claim for the full breakdown of the federal side. Everything below is about the state and local layer that sits on top of (or independent from) that federal picture.

Category 1: State tax credits — two concrete examples

A handful of states offer their own income tax credit for installing residential solar, on top of whatever federal incentive is or isn’t available. Two well-documented examples:

• South Carolina offers a state income tax credit equal to 25% of system cost, capped at $3,500 per year, with unused credit carried forward for up to 10 years (lifetime cap of $35,000), under S.C. Code § 12-6-3587. It currently has no expiration date.
• New York offers a state tax credit of 25% of installed cost, capped at $5,000 lifetime, covering the first 25 kW of a net-metered system, and it’s available to owners, lessees, and community solar subscribers alike, under NY Tax Law § 606(g-1) (see Form IT-255 instructions).

Not every state has a credit like these, and where one exists, the percentage, cap, and eligibility rules are set by that state’s legislature and can change with each budget cycle — confirm current terms on your state’s DSIRE listing before relying on any number, including the ones above.

Category 2: Direct rebates and performance-based incentives

Separate from tax credits, some states and individual utilities pay for solar production directly. New Jersey’s Successor Solar Incentive (SuSI) program is a documented example: it pays a fixed rate per megawatt-hour produced, for 15 years from interconnection, administered by the NJ Board of Public Utilities. The rate isn’t static — it launched at $90/MWh when the program began on August 28, 2021, and steps down periodically as capacity fills, so confirm the current rate directly at cleanenergy.nj.gov before assuming a figure. Programs like this are frequently capped by budget or block allocation, meaning they can close to new applicants and reopen later at a different rate — check both your state’s program and your specific utility, since utility-run rebates can vary within the same state.

Category 3: Property tax exemptions

Installing solar panels can increase your home’s assessed value, which would normally mean a higher property tax bill. Many states address this with a solar property tax exemption. South Carolina, for example, fully exempts residential solar systems up to 20 kW (AC) from added property tax assessment under S.C. Code § 12-37-220(B)(53). The scope of these exemptions varies by state — some cover the full value increase, others are partial or capped — so check your specific state’s rule via DSIRE or your county assessor.

Category 4: Sales tax exemptions

A separate group of states exempt solar equipment (and sometimes labor) from state sales tax at the point of purchase. Where this exists, it’s typically applied automatically by the installer at the time of sale rather than something you claim later, but it’s worth confirming with your installer that the exemption is being applied, since not all contractors handle every available exemption by default.

Category 5: Net metering and net billing policy — two states compared

This is arguably the single factor that affects long-term solar savings more than any one-time rebate or credit, and the gap between states can be dramatic:

• California replaced retail-rate net metering with a “Net Billing Tariff” under CPUC Decision D.22-12-056 (approved December 15, 2022, effective April 15, 2023). Export credits are now based on an hourly Avoided Cost Calculator instead of the retail rate — commonly reported as a drop from roughly $0.30/kWh under the old rules to somewhere around $0.05-0.08/kWh under the new ones, though the exact value varies hour by hour, so verify your specific credit structure with your utility.
• New Jersey, by contrast, still credits solar export at the full retail rate, 1:1, under N.J.S.A. § 48:3-87(e), with monthly rollover and only the year-end surplus paid out at a lower rate.

Two states, same basic technology, very different economics for exported power — this is exactly why confirming your own utility’s current net metering or net billing structure matters more than any single “solar is worth it” headline.

Category 6: Community solar

If you rent, live in an HOA that restricts rooftop installations, or simply don’t have a roof suited to solar (heavy shade, wrong orientation, structural issues), community solar programs offer an alternative. You subscribe to a share of a larger, off-site solar array, typically for a subscription fee, and receive a credit on your electric bill corresponding to your share of the array’s output — without installing anything on your own property. Availability depends entirely on whether your state has enabled community solar and whether a project has capacity in your utility territory, so this is very much a “check your specific location” category rather than a universal option.

Incentive types at a glance

How to check what’s actually available where you live

The most reliable starting point is DSIRE, the Database of State Incentives for Renewables & Efficiency, a free, publicly funded resource maintained by the NC Clean Energy Technology Center at NC State University. It’s the closest thing to an authoritative, continuously updated national registry of state, local, and utility-level clean energy incentives, and it lets you filter by state and technology to see what currently applies to residential solar.

Because net metering and utility-specific rebate details can change faster than any third-party database, it’s also worth calling or checking the website of your specific electric utility directly, especially to confirm the current net metering or net billing tariff and whether any utility rebate program is currently accepting applications. An installer quoting your project should also be able to tell you which state and local incentives they typically apply for on behalf of customers in your area — but verify independently rather than relying solely on a sales quote.

Putting it together with the federal picture

Since the federal 30% credit is no longer available for systems placed in service from 2026 onward, state and local incentives — along with your utility’s net metering terms — now carry proportionally more weight in determining whether solar pencils out for your home. For a framework on weighing all of these factors together, see Is Solar Still Worth It in 2026?, and for a baseline on what systems typically cost before any incentives are applied, see How Much Do Solar Panels Cost in 2026?.

The examples above cover a handful of well-documented programs, not all 50 states — incentive programs run out of funding, get renegotiated, or change rates often enough that a full directory would go stale within months. Search DSIRE for your specific state before assuming any of the above applies where you live.

Sources

• South Carolina Code § 12-6-3587 (state tax credit) — scstatehouse.gov (consulted August 9, 2026)
• South Carolina Code § 12-37-220(B)(53) (property tax exemption) — scstatehouse.gov (consulted August 9, 2026)
• New York Tax Law § 606(g-1) / Form IT-255 instructions — tax.ny.gov (consulted August 9, 2026)
• New Jersey Board of Public Utilities, SuSI program launch announcement — nj.gov (consulted August 9, 2026)
• New Jersey Statutes § 48:3-87(e) (net metering) — law.justia.com (consulted August 9, 2026)
• California Public Utilities Commission, Decision D.22-12-056 (Net Billing Tariff) — cpuc.ca.gov (consulted August 9, 2026)
• DSIRE (Database of State Incentives for Renewables & Efficiency) — dsireusa.org (consulted August 9, 2026)