2023 Solar Incentives Guide for Danville, KY - Tax Credits & Rebates

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

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

Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more people to switch to renewable energy. You may qualify for different kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Kentucky and others from the federal government. Some solar incentives you might qualify for are:

• Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Net Metering: You can sign a net metering agreement with your Danville utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your utility bill each month.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your house.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

To find out exactly how much the ITC could save you, contact your local Danville solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Danville solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these can include rebates, tax credits and more. Incentives may be handled by the state of Kentucky, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Danville

The expanding number of available solar incentives has enormously increased the adoption of solar energy nationwide over the past 15 years. You can get solar incentives from your local utility company, the Kentucky government or the federal government. When you're prepared to make the switch to solar energy, talking to your local Danville solar panel installation expert is a great first step.