The 30% federal solar Investment Tax Credit is the single biggest incentive available to most American homeowners, but it's far from the only one. Dozens of states, utilities, and local governments offer additional incentives that stack on top of the federal credit — cutting your net installation cost even further. In states like New York, Massachusetts, and Maryland, the combined value of federal and state incentives can reduce your total solar cost by 40–50%. Missing out on available state programs means leaving thousands of dollars on the table.

Best State Solar Incentive Programs in 2026

• New York

  New York offers a state solar tax credit of 25% of installed cost (up to $5,000), stacking directly on top of the federal ITC. The NY-Sun Megawatt Block Program also provides upfront rebates through participating installers in many utility territories. Combined with the federal credit, New York homeowners can sometimes recoup 50%+ of their installation cost through credits and rebates.

• Massachusetts

  Massachusetts has a 15% state income tax credit (up to $1,000) plus a Solar Massachusetts Renewable Target (SMART) program that pays solar owners a fixed rate per kWh produced for 10 years. Solar installations are also exempt from state sales tax and property tax assessment increases.

• California

  California's Self-Generation Incentive Program (SGIP) provides rebates for battery storage systems. The state's Property Tax Exclusion for Solar Energy Systems exempts solar installations from property tax reassessment. Note that California's NEM 3.0 policy reduced export credit rates, making battery storage more financially important than in previous years.

• Maryland

  Maryland offers a $1,000 state income tax credit plus a Clean Energy Rebate Program through the Maryland Energy Administration. Several Maryland utilities also offer net metering at full retail rates, making Maryland one of the more solar-friendly states in the Mid-Atlantic region.

• Texas

  Texas has no state income tax, so state tax credits don't apply — but Texas solar owners benefit from a 100% property tax exemption on the added home value from solar. Some Texas utilities and co-ops also offer rebate programs. The strong sun exposure in most of Texas compensates for the relative lack of direct subsidies.

Even in states without a direct solar rebate or tax credit, there are often two categories of exemption worth checking: property tax exemptions and sales tax exemptions. Most states that have adopted solar-friendly policies include at least one of these. Property tax exemptions mean that the value a solar installation adds to your home (studies suggest solar adds $15,000–$25,000 to a median home's value) is excluded from property tax assessment — you get the value without the higher tax bill.

Sales tax exemptions eliminate the 5–9% sales tax that would otherwise apply to panel and equipment purchases. On a $20,000 system, that's $1,000–$1,800 in savings — not trivial. Over 25 states currently offer sales tax exemptions on solar equipment. Your installer should factor all applicable exemptions into your quote, but it's worth independently verifying what's available in your state through the Database of State Incentives for Renewables and Efficiency (DSIRE) at dsireusa.org.

Utility company rebates are a third category of incentives that often get overlooked. Many electric utilities — particularly municipal utilities and rural cooperatives — offer their own direct rebate programs for solar installations, separate from state programs. These rebates are typically paid directly by the utility after your system passes interconnection inspection and can range from $200 to $1,500 or more depending on system size. Check your utility company's website or call their customer service line to ask specifically about any solar incentive programs before signing a contract — your installer may not always be aware of utility-level programs in every territory they serve.