2024 Solar Incentives Guide for Paducah, KY - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Paducah.
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 Paducah?
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Kentucky and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when calculating the amount of property tax you need to pay on your home.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before any tax credits are calculated.
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Paducah utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
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 some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property owned by you for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, accessories, labor and equipment), although this amount has fluctuated slightly over time 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.
Have questions about how the ITC applies to your specific situation? Reach out to your local Paducah solar panel installer to get more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit applies to you, get in touch with your local Paducah solar installation expert.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives might be given out by the Kentucky government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Paducah
There are many kinds of solar incentives: those offered by local utility companies, those provided by the Kentucky government and those provided by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. Talking to your local Paducah solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Paducah, KY Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
Your best bet is to talk to someone from the company that installed your solar panels – or reach out to a local Paducah solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Paducah?
On average, homeowners in Paducah who install solar panels save approximately $997.64 per year, or around $18,955.08 over 20 years after making the switch.
Who installs solar panels near me?
To learn about the top solar panel installers near you, take a look at our article on the top solar companies in Paducah.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called 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.
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.