2024 Solar Incentives Guide for Jeffersontown, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Jeffersontown.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Jeffersontown?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more Americans to convert their home partially or fully to renewable energy. These incentives may include upfront discounts, cash back 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 utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Jeffersontown utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
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Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
To more fully understand how the ITC may apply to you, reach out to your local Jeffersontown solar panel installer and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Now, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit applies to you, get in touch with your local Jeffersontown solar installation company.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Similar to federal incentives, these can include tax credits, rebates and more. Incentives may be handled by the state of Kentucky, or by your county or municipality. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Jeffersontown
Nationwide solar energy use has gone up significantly in the last 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the Kentucky government or the federal government. Your local Jeffersontown solar panel installation expert can help you learn more about which incentives you should apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Jeffersontown, KY Solar Incentives FAQs
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now called the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you are eligible for but typically yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to verify you are claiming all the incentives you're eligible for and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you talk through your plan with your local Jeffersontown solar installer. They can help you as you plan for your project and educate you on the various incentives that you will or won't qualify for.
What if I add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.