Solar Cost Predictor

State Solar Rebates and Incentives: The Complete 2026 Guide

By Solar Cost Predictor Team · February 20, 2026 · 9 min read

For years, the federal 30% Residential Clean Energy Credit was the biggest solar incentive available — and it ended for homeowners installing in 2026. See our guide to what changed for the full story. What a lot of buyers don't realize is that most states layer their own incentives on top of (or instead of) the now-expired federal one.

This guide catalogs the major state-level solar incentives available in 2026, organized by type. None of these were affected by the federal credit's expiration — check your state to see what you still qualify for.

Types of State Solar Incentives

State solar incentives fall into four main categories:

1. State Income Tax Credits

Direct credits against your state income tax bill, similar to the federal ITC. Available in about 15 states. Amounts range from 15–35% of system cost.

2. Upfront Rebates

Cash rebates paid after installation — typically by the state energy office or utility. These reduce your net cost immediately and do not require owing taxes to use them.

3. Property Tax Exemptions

Solar panels increase home value — but most states exempt this added value from property tax assessment. Without this exemption, a $20,000 solar system could increase your annual property tax bill by $200–$400.

4. Sales Tax Exemptions

Some states waive sales tax on solar equipment purchases, saving 5–10% on equipment costs. On a $20,000 system, this can be worth $1,000–$2,000.

Best State Solar Incentive Programs (2026)

These states offer the most generous solar incentive programs in 2026, independent of the now-expired federal credit:

StateIncome Tax CreditRebateProperty Tax ExemptSales Tax Exempt
New York25% (max $5,000)NY-Sun up to $5,000Yes (15 years)Yes
Massachusetts15% (max $1,000)Up to $1,000 (MassCEC)YesYes
New JerseyNoneNone statewideYesYes
MarylandNone$1,000 residentialYesYes
South Carolina25%Varies by utilityYesYes
Montana$500NoneYesNo
OregonNoneUp to $5,000 (IDA)YesNo
TexasNoneVaries by utilityYes (100%)Yes (equipment)

Note: New Jersey's lack of upfront rebates is offset by one of the nation's best SREC markets. See our SREC guide for details.

Utility Rebates: Often Overlooked Savings

Beyond state programs, many individual utilities offer their own solar rebates — sometimes substantial:

  • Austin Energy (Texas): $2,500 rebate for systems up to 20 kW
  • Los Angeles DWP (California): Solar incentive program with rebates based on production
  • Green Mountain Power (Vermont): Up to $1,500 in rebates
  • PSEG Long Island (New York): Additional rebates on top of NY-Sun
  • National Grid (MA/NY): Smart Energy incentive programs

Always ask your installer to identify all utility-level programs in your service territory — these are often not well-advertised but can add $500–$2,500 to your total savings.

How to Stack Incentives for Maximum Savings

Example: New York homeowner, $22,000 system, 2026 incentive rules (no federal credit):

IncentiveAmountRunning Total
Gross system cost$22,000
NY state tax credit (25%, max $5,000)−$5,000$17,000
NY-Sun rebate−$3,000$14,000
Sales tax exemption (8%)−$1,760$12,240

Net cost after all state incentives: $12,240 — a 44% reduction from the gross cost, entirely from state-level programs. That's a smaller reduction than when the federal credit was also in the mix, but it shows why state incentive research still matters in 2026 — New York has some of the best stacking potential in the country.

Frequently Asked Questions

Is there still a federal solar tax credit in 2026?

Not for a typical homeowner-owned residential system. The 30% federal Residential Clean Energy Credit ended for any system placed in service after December 31, 2025, repealed by the One Big Beautiful Bill Act with no phase-down. See our full guide for details.

Do solar rebates count as taxable income?

Utility rebates typically reduce your basis in the system rather than counting as separate taxable income. State rebates may or may not be taxable depending on the program. Consult a tax professional for your specific situation.

Can I still stack multiple state incentives in 2026?

Yes — state income tax credits, utility rebates, property tax exemptions, and sales tax exemptions are generally independent programs and can be combined in states that offer more than one. None of these were affected by the federal credit's expiration.