2024 Solar Incentives Guide for Louisville, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Louisville.
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 Louisville?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage the use of renewable energy by making solar panels more affordable. You may be eligible for various types of incentives, including 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 Kentucky government and others from the federal government. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your house.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. These differ from tax deductions.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Louisville utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
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 incentives are the kind of incentives that you are most likely to have heard of. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of your solar system's cost.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. The ITC initially covered 30% of all system costs (panels, equipment, accessories and labor), although the total amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Louisville solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems that began installation on or after January 1, 2022, and will be done by December 31, 2032. The credit will then see a slight annual decrease until it expires. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Louisville solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more can be offered at a more local level. These incentives may be distributed by your county or municipality, or by the Kentucky government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Louisville
The expanding number of solar incentives available has enormously increased the nationwide adoption of solar energy over the past 15 years. You can get solar incentives from your local utility company, the federal government or the Kentucky government. Reaching out to your local Louisville solar panel installer is a great first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Louisville, KY Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's best to speak with your local Louisville solar installer to get an understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the Kentucky government, might have other requirements.
How much can I save on my electric bill annually if I add solar panels to my house in Louisville?
Generally, homeowners in Louisville who install solar panels save approximately $860.69 per year, or around $17,213.78 over 20 years after making the switch.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is set to end on 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 up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in might vary depending on which incentives you receive but usually yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to confirm you are claiming all possible incentives and applying them in the correct order.
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives apply to a second home, as long as it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
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.