2025 Solar Incentives Guide for Alexandria, KY - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Alexandria?

Source: https://www.dsireusa.org/

Solar incentives are meant to encourage people to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the Kentucky government or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your house.
• Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Alexandria utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
• Rebates: Solar rebates can be offered by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost – for panels, equipment, accessories and labor – although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

Wondering how the ITC applies to your specific situation? Reach out to your local Alexandria solar panel installer to get more information.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners are now eligible for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then decrease annually until it expires. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Alexandria solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Incentives may be provided by your county or municipality, or by the state of Kentucky. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Alexandria

Solar incentives may be provided by the federal government, the Kentucky government or your local utility company. The growing number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Alexandria solar installation expert to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.