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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Updated September 15, 2023
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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
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage homeowners to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Incentives can 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 by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Make sure you speak with your Lexington-Fayette utility company about signing a net metering contract. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: These could come in the form of property tax exemptions, which let you ignore the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. These are different from tax deductions.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.
The ITC is applied to the total cost of installing solar panels, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Contacting your local Lexington-Fayette solar panel installer is the best way to learn more about how the ITC could apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will decrease slightly on a yearly basis until the current program ends. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
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 talk with your local Lexington-Fayette solar panel company.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. The incentives — which may be given by your county or municipality, or by the state of Kentucky — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Lexington-Fayette
You can apply for solar incentives from the federal government and the Kentucky government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local Lexington-Fayette solar panel installer can give you more information about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's Lexington-Fayette, KY Solar Incentives FAQs
What if I want to add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences will fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
I already have solar panels. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your system, or any local Lexington-Fayette solar installer, can help you learn what incentives you qualify for.
How much can I save annually on my electric bill if I add solar panels to my house in Lexington-Fayette?
Typically, Lexington-Fayette homeowners who install solar panels save approximately $801.20 per year, or approximately $15,222.82 over 20 years after making the switch.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to Lexington-Fayette's best solar panel companies.
If I change out my appliances for ones that can utilize solar energy, are there credits I can claim?
The recently passed Inflation Reduction Act provides several incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
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.