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

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

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

Solar incentives are intended to encourage homeowners to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. The incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Kentucky and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
• Net Metering: Don't forget to talk with your Independence utility company about signing a net metering agreement. This will allow you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions allow you to exclude the value added by your solar system when you calculate how much property tax you need to pay.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. These differ from tax deductions.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.

The ITC applies 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, labor and accessories – although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

To more fully understand how the ITC might apply to your situation, call your local Independence solar panel installer and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly each year until the current program ends. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to speak with your local Independence solar panel installation expert directly.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. These solar incentives — which might be handled by the state of Kentucky, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Independence

The large number of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from your local utility company, the Kentucky government or the federal government. If you're ready to make the change to solar energy, reaching out to your local Independence solar panel installation expert is an excellent place to start.