2024 Solar Incentives Guide for Murray, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Murray.
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 Murray?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. You may qualify for different kinds of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Kentucky and others from the federal government. Categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Murray utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates may be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for a solar system and before tax credits are calculated.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC originally covered 30% of the cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Contacting your local Murray solar panel installer is the best way to learn more about how the ITC applies to you.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit; the amount will be decreased slightly each year until the end of the current program. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, reach out to your local Murray solar installation expert.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. Some incentives are ongoing, while others are available for a limited time. They may be provided by the Kentucky government, or by your county or municipality.
Next Steps for Installing Solar in Murray
The nationwide use of solar energy has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from the Kentucky government, the federal government or your local utility company. Reaching out to your local Murray solar panel installation company is an excellent first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Murray, KY Solar Incentives FAQs
How do I know if I qualify for different solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on a property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Kentucky government or by your county/municipality, sometimes have additional qualifications. Get in touch with your local Murray solar installer to learn more about what incentives your project may qualify for.
If I installed solar panels on my house a few years ago, can I still claim incentives?
An excellent idea would be to talk to the company that installed your solar panels – or speak to a local Murray solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me on my electric bill in Murray annually?
Generally, homeowners in Murray who install solar panels save about $717.37 per year, or approximately $14,347.42 over 20 years after making the switch.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and that you're getting the most money possible.
Can I use multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of wind and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss your plan with your local Murray solar installation expert, so that you understand what you'll need and what types of incentives you may or may not qualify for.
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.