2023 Solar Incentives Guide for Lexington Fayette, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lexington Fayette.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Lexington Fayette?
Clark Energy - Residential Energy Efficiency Rebate Programs
Air Sealing/Ceiling Insulation: Up to $750
SimpleSaver Program: $20/yr/air conditioner enrolled
ENERGY STAR Manufactured Home: Varies, contact utility for more information
CARES Program: Up to $2,000/household
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. These incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Kentucky government and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Rebates: Solar rebates might be provided by your state or county, 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.
- Tax Exemptions: Your solar panel system might 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 ignore the value added by your solar panels when calculating property taxes on your house.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. These differ from tax deductions.
- Net Metering: Be sure to talk to your Lexington Fayette utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, accessories, labor and equipment — although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Have questions about how the ITC applies to your specific situation? Contact your local Lexington Fayette solar panel installation expert to get more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, speak with your local Lexington Fayette solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. As with federal incentives, these might include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. These incentives might be given by your county or municipality, or by the Kentucky government.
Next Steps for Installing Solar in Lexington Fayette
You can qualify for solar incentives from the Kentucky government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. Contact your local solar panel installer today to learn more and to save as much money as possible on solar panels for your Lexington Fayette home.
EcoWatch's Lexington Fayette, KY Solar Incentives FAQs
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.